TeachMeFinance.com - explain Money Market
money market -- the activity generated by financial institutions that facilitate the purchase, sale, and transfer of lendable funds in the form of short-term debt securities such as promissory notes, collateral loans, and Treasury bills.
Money Market -- The market for short term financial instruments (i.e. commercial paper, treasury bills, discount notes).
Money market. This is a term applied to the business of lending money and not to a place where money is loaned, for there is no specific place (in New York) for lending money. In New York the banks, trust companies and insurance companies are the chief lenders of money, but there are other corporations and not a few firms and individuals who are lenders. As in every other market supply and demand are the factors which determine prices, or in other words, the rates exacted for the use of money. If the demand is large and the supply small rates are high ; if the demand is small and the supply large rates are low. Money is stiff when it commands high rates of interest. It is tight when it is difficult to obtain even at high rates ; in these circumstances there is a pinch or stringency in money. There is a squeeze in money when it cannot be borrowed except at exorbitant rates ; in a squeeze a premium as well as interest is exacted on call loans.
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