Stock Markets

What is a simple explanation/definition for stock markets? How did they generate economic wealth? Thanks!

Stock is ownership in a corporation. You can buy stock in Apple Co. If Apple Co does well your stock is worth more to others to buy thus needs market to sell on. . . the stock market. The Stock Market is perceived wealth and can plummet at any time.

The SM was formed as corporations were formed. Corps do not have one individual owner and can take on a limited liability if they struggle. Thus Apple is owned by stock holders. If Apple goes out of business, those stock holders do not need to pay back debt. Thus thus thus, if is beneficial for a corp to have limited liability so it can take risks such as building large railroad systems!

1 Like
Fiveable Logo

2550 north lake drive
suite 2
milwaukee, wi 53211



about for students for parents for teachers for schools & districts content team privacy contact


🥇 2020 Fiveable Olympics study plans upcoming events trivia hypertyper resources cram passes


community tiktok discord twitter instagram facebook careers

*ap® and advanced placement® are registered trademarks of the college board, which was not involved in the production of, and does not endorse, this product.

© fiveable 2020 | all rights reserved.