State with reasons whether you agree or disagree with the following statement (any three): In India the role of money market is very important.

Answer: I agree with the statement.

Reasons:

1. Short-term finance: It provides short-term funds to trade, industry and agriculture for working capital.
2. Helps the government: The government raises short-term funds through treasury bills.
3. Monetary policy: It helps the RBI implement monetary policy through repo rate, CRR and open market operations.
4. Liquidity and use of surplus funds: Banks and institutions invest surplus funds for short periods and earn returns while staying liquid.
5. Economic growth: By mobilising savings and channelling them into productive use, it helps economic development.