The Economics of Money, Banking and Financial Markets (11th Edition) (The Pearson Series in Economics)
The Economics of Money, Banking and Financial Markets (11th Edition) (The Pearson Series in Economics)
11th Edition
ISBN: 9780133836790
Author: Frederic S. Mishkin
Publisher: PEARSON
Question
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Chapter 1, Problem 4Q
To determine

The importance of financial markets to the health of an economy.

Context Introduction:

Financial markets refer to a marketplace in which trade of various securities take place. It includes trade of securities such as bonds, shares, currency and also derivatives. These securities are traded at a very low transaction cost.

Unproductive funds refer to the set of funds which has least value or production to it. They do not have anyproductive use and thus the funds remain unproductive.

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