Economics 12 Notes for Economics Notes

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Concept of money market

Money market refers to the transaction of short term/run credit instrument. These instruments are highly liquid, easily marketable with little chance of loss. The maturity period of these instruments are less than one year. The examples of instruments are treasury bill, bill of exchange, promissory note.

The main function of money market is to make available working capital to the business sector and short term loan to the government.

According to World Bank, a market in which short term securities such as treasury bills, certificates of deposits and commercial bills are traded.

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