Economists use the term "financial markets" to mean the markets in which

Question

Quizplus · Accepted Answer

Financial markets are the markets where firms get the funds they use to buy physical capital. Examples of financial markets include stock markets and bond markets.

The other options - A, B, D, and E - are not correct because they do not refer to financial markets. Households supplying labour services, the government borrowing to fund any budget surplus, and firms purchasing physical capital may involve financial transactions, but they do not take place in financial markets. Firms supplying goods and services is simply a description of their production activities, not a reference to financial transactions.

Economists Use the Term "Financial Markets" to Mean the Markets