Explanation:

Both statements are correct.

About Financialisation

• Financialization refers to the increasing influence of financial motives, markets, instruments, actors, and institutions in both domestic and international economies.

• It involves the growing dominance of finance tools in firm management, the impact of financial markets on decision-making, and the significance of the global financial system in capital distribution worldwide.

• It represents the shift from traditional industrial or productive activities (like manufacturing) to financial activities that involve the trading, management, and speculation of financial assets.

• Financialization transforms the functioning of the economic system at both the macro and micro levels.

Its principal impacts are

• Elevate the significance of the financial sector relative to the real sector;

• Transfer income from the real sector to the financial sector;

• Increase income inequality and contribute to wage stagnation.

It operates through three different conduits: changes in the structure and operation of financial markets, changes in the behavior of non-financial corporations, and changes in economic policy.

Hence option 3rd is correct.