Financial Markets – Economics Revision – The Tutor Academy

Level: AS Levels, A Level, GCSE – Exam Boards: Edexcel, AQA, OCR, WJEC, IB, Eduqas – Economics Revision Notes

Financial Market – a market consisting of buyers and sellers who trade financial instruments such as bond, assets, equity etc

Some of the main Financial Markets

• Money Markets – the trading of short-term loans such as treasury bills
• Capital Markets – the trading of financial securities in a stock market or bond market. Encourages private and public sectors to gain finance
• The Foreign Exchange Market – the trading of currencies
• The Derivatives Market – trading of financial instruments. E.g futures contracts, and options contracts

Quick Fire Quiz – Knowledge Check

1. Define a ‘Financial Market’ (2 marks)
2. Identify and explain the four types of Financial Markets (8 marks)
3. Identify two examples of a capital market (2 marks)

Next Revision Topics

• The role of Financial Markets
• Market Failure in the Financial Sector
• The role of Central Banks
• Quantity Theory of Money
• The Functions of Money
• Financial Regulation

A Level Economics Past Papers

• AQA
• Edexcel
• OCR
• WJEC