Question

Which is the main problem of the money market?

• A. Lack of capital
• B. Hundi
• C. Lack of market
• D. None of these

Hint:

A lack of capital in the money market can cause liquidity issues and restrict economic growth.

Answer 1

The Correct Option is A

Step 1: Understand the money market.
The money market is a segment of the financial market that deals with short-term borrowing and lending. One of its primary challenges is the availability of capital, which affects the liquidity and efficiency of the market.
Step 2: Evaluate the options.
- Lack of capital is a key issue that restricts the operations and growth of the money market, especially during periods of economic downturn. - Hundi is a traditional method of informal credit, which is not a core problem of the money market itself. - Lack of market typically refers to less demand or liquidity, but capital availability is a more pressing issue.
Step 3: Conclude.
The main problem of the money market is the lack of capital.
Final Answer: \[ \boxed{\text{Lack of capital}} \]