Question

What are the five parts of the Financial System?

Answer 1

• Money

Money is used as a medium of exchange ,a store of value and unit of measurement of value of goods and services.

• Financial instruments

Are deeds and contracts which entitle an entity a part of assets due to the witholder.

• Financial Markets

These are markets which are specifically hubs for buyers and sellers of financial instruments. Usually there are two types primary and secondary markets.

• Financial institutions

Financial institutions acts as access points for financial instruments in the market. These instutions enable easier exchange and borrowings and greatly enable the velocity of exchange.

• Central Banks

Central banks or Apex banks are government instituion which gurantee and oversee fianancial instituions and markets for proper regulation, and acts as an insurance.

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