Financial Markets and Institutions Introduction Quiz
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Questions and Answers

What is the main function of the financial system?

  • Efficient and effective distribution of economic resources to achieve economic growth (correct)
  • Minimizing the risks faced by financial institutions
  • Ensuring equal distribution of economic resources among all parties
  • Guaranteeing high returns on investment for the investors
  • What is the role of financial institutions in the financial system?

  • To solely focus on achieving high returns on investment for the investors
  • To regulate the stock market and prevent economic crises
  • To provide various financial services and facilitate the flow of funds (correct)
  • To ensure equal distribution of economic resources among all parties
  • What is the main purpose of distinguishing between different financial markets?

  • To ensure fair distribution of resources among market participants
  • To minimize risks for financial institutions
  • To understand the specific functions and characteristics of each market (correct)
  • To maximize profits for individual investors
  • What drives the development of economic systems according to the text?

    <p>Scarcity of economic resources</p> Signup and view all the answers

    What does the financial system act as according to the text?

    <p>An intermediary facilitating fund flow from surplus to deficit parties</p> Signup and view all the answers

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