What You Will Learn in This Chapter

What is meant by the financial system. sWhat is meant by monetary policy. sThe ways in which the financial system contributes to economic well-being—by transferring resources from surplus to deficit spending units; by providing a variety of financial instruments to participants; by providing a reliable and efficient payment system; by providing for a better allocation of risk in the economy; and by imposing discipline on business management. Some basic features of the financial system that will keep coming up in our study.

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