The financial system is made up of:
A) institutions that bring together savers, borrowers, investors, and insurers in a set of interconnected markets where people trade financial products.
B) borrowers and savers using banks to complete transactions and make investments.
C) institutions such as the World Bank, International Monetary Fund, Federal Reserve, and World Trade Organization.
D) the government and its central bank.

Question

Quizplus · Accepted Answer

The financial system is a complex network of institutions, markets, and intermediaries that bring together borrowers, savers, investors and insurers to facilitate the flow of capital and support economic activity. This option best describes the various components of the financial system. B is too simplistic and only focuses on banks. C is not entirely accurate as it only looks at a few institutions and doesn't explain what they do. D is also too narrow as it only includes the government and central bank, but not other key players in the financial system.

The Financial System Is Made Up Of