The basic requirements for an effective financial system in a developed economy include:
A) a store of gold reserves
B) markets for the sale of goods and services
C) markets for the transfer of financial assets
D) a freely elected government to oversee markets

Question

Quizplus · Accepted Answer

Option A is incorrect as a store of gold reserves is not a necessary requirement for an effective financial system in a developed economy.

Option B is also incorrect as markets for the sale of goods and services are not directly related to a financial system.

Option D is incorrect as it pertains to political system requirements and not financial system requirements.

Option C is correct as markets for the transfer of financial assets, such as stocks, bonds, and derivatives, are essential components of an effective financial system in a developed economy. These markets offer avenues for individuals and institutions to invest their money and earn returns, enabling the efficient allocation of funds and capital across the economy.

The Basic Requirements for an Effective Financial System in a Developed