The role of Financial Markets

The role of Financial Markets

Courses Info

The Key functions of a Financial Market

1. Lending to businesses and individuals

  • Financial Markets act as a third party platform between savers and borrowers to facilitate lending

2. To facilitate saving

  • Financial Markets provide households and businesses with a range of accounts for them deposit money into and also ear interest from

3. To facilitate the exchange of goods and services

  • Financial Markets allow for several transactions to take place; such as, consumers to make payments in shops, people to settle debts and workers to receive wages
  • It also enables transaction methods like performing a contactless payment, to be carried out

4. To provide a market for equity

  • Financial Markets allow businesses to fund their capital investment by raising equity

Quick Fire Quiz – Knowledge Check

1. Identify and explain four key functions of a Financial Market (8 marks)

 

Next Revision Topics

 

A Level Economics Past Papers

Tushar Depala

Author: Tushar Depala

Economics Tutor

View Profile Hire Tushar Depala