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Chapter 2: Q.3 (page 96)

Give at least three examples of a situation in which financial markets allow consumers to better time their purchases.

Short Answer

Expert verified

Purchasing for durables, education expenses and emergency expenses are the three cases in which financial markets allow consumers to better time their purchases.

Step by step solution

01

Step 1. Introduction

Financial market is a place where the dealing of bonds, debentures, shares, and stocks takes place. These financial market places important role in improving the economic structure of the nations.

02

Step 2. Explanation

The financial market facilitates the transfer of surplus funds from savers to investors. It enables customers to synchronize their purchases, such as the purchase of a vehicle, payment for education, and immediate payment in the event of an emergency. In all of the aforementioned cases, the consumer can pay for the goods and services that he is using without having to save up enough money first.

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