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JAMB Economics 1987 Question 33

Question 33

Financial Institutions

Money market differs from capital market in that it

  1. A.deals with short-term loans while capital market deals with long-term funds
  2. B.deals with money only while capital market deals with capital as well
  3. C.is limited in scope while capital market is not
  4. D.uses interest rates while capital market does not.
Show the answer and explanation

Answer: A (deals with short-term loans while capital market deals with long-term funds)

Explanation

The money market handles short-term funds; the capital market handles medium- and long-term funds.