Why Finance is important for economy?

From a macro perspective, Finance is merely the practical application of economics. The Financial System is the means by which an economy allocates money to its highest valued use. In English, it is how people, businesses, and governments raise the cash needed to do business. The goal of any financial system is to make sure that those with good ideas get the money necessary to implement the ideas. How this is accomplished in a market-based economy is through the stock and bond markets. In a market-based economy, investors invest in a firm (by firm here I am merely simplifying, the "firm" could be a government or organization as well) and the firm takes the investment and uses it to implement the business ideas. People do not give money without the expectation of getting something in return. (However, if you are the sort of person who merely likes to give money away, please contact me!) If money is given, something is expected back in return. In this case more money. The way to get the most money back is to invest in firms that will put the money to the best use. Of course others know this as well. As more invest with a firm the value of the firm's stock rises. In competition for more money, firms will strive to find better investments. This leads to economic growth, more jobs, and hopefully a higher standard of living.