Flashcards: Fundamentals of Financial System and Markets — 20 cards

Financial System Components — elements?

Institutions, markets, instruments, services.

Participants in Markets — roles?

Lenders, borrowers, investors, government.

Financial Market Types — examples?

Capital, money, foreign exchange, derivatives.

Financial Institutions Role — function?

Mobilize savings, allocate funds.

Financial Instruments Types — categories?

Shares, bonds, derivatives.

Instruments Classification — based on?

Ownership, debt, money.

Financial Regulators — examples?

Central banks, securities commissions.

Money and Banking Interaction — relationship?

Money facilitates transactions; banks create and circulate money.

Surplus Spending Units — definition?

Entities with excess income, save or lend.

Deficient Spending Units — definition?

Entities needing funds, borrow for expenses.

Financial Market — purpose?

Trade financial instruments, transfer funds.

Financial Institutions — main function?

Intermediaries linking savers and borrowers.

Financial Instruments — legal document?

Represents rights/obligations in transactions.

Classification of Instruments — main types?

Ownership (shares), debt (bonds), money (notes).

Financial Regulators — main goal?

Ensure stability, transparency, protect investors.

Money — role?

Medium of exchange, store of value, unit of account.

Banking Functions — include?

Accept deposits, give loans, facilitate payments.

Surplus Units — examples?

Households, government with excess funds.

Deficit Units — examples?

Firms, households, government borrowing.

Interaction of Money and Banking — importance?

Supports liquidity, economic activity, stability.