Financial markets have the basic function of
A)getting people with funds to lend together with people who want to borrow funds.
B)assuring that the swings in the business cycle are less pronounced.
C)assuring that governments need never resort to printing money.
D)providing a risk-free repository of spending power.

Question

Quizplus · Accepted Answer

Financial markets facilitate the transfer of funds from those who have excess funds (savers) to those who need funds (borrowers), thereby fulfilling their basic function of connecting lenders and borrowers. This helps to allocate resources efficiently and can also reduce the overall cost of borrowing.

Financial Markets Have the Basic Function of