Edexcel A Level Economics A:复习笔记4.4.1 Role of Financial Markets
Role of Financial Markets
- Financial markets?are any place or system that provides buyers & sellers the means to exchange goods/services & trade?financial instruments
- These include bonds, equities, international currencies, &?derivatives
- They facilitate saving:?storing money for future use is essential for households & firms. It also provides a pool of money that financial institutions can lend i.e. one person's savings is another person's borrowing
- They lend to businesses & individuals:?access to credit is a key requirement for economic growth & development. Being able to borrow money speeds up?consumption?by households &?investment?by firms. It also allows households or firms to?purchase?assets?& pay them off over an extended period of time e.g. mortgages on home purchases
- They facilitate the exchange of goods & services:?each purchase of goods/services requires the?movement of money?between at least two parties. Financial markets provide multiple ways for this exchange to happen including phone apps (Google Pay), debit cards, credit cards & bank transfers
- They provide forward markets in currencies & commodities:?forward markets are also called?futures markets. They provide some?price stability?in commodity markets & enable investors to make a profit by?speculating?on future prices
- They provide a market for equities:?equities are shares in public companies that are listed on stock exchanges around the world. Financial markets facilitate both?long term investment &?speculation?by providing platforms which connect buyers & sellers e.g. E-Trade
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