The liquidity function of the financial system is designed to protect businesses, consumers and governments against risks to people, property and income.

Question

Quizplus · Accepted Answer

The liquidity function of the financial system is designed to facilitate the buying and selling of assets without causing significant changes in their prices, not specifically to protect against risks to people, property, and income. Protection against such risks is more directly related to the functions of insurance and risk management within the financial system.

The Liquidity Function of the Financial System Is Designed to Protect