Money market and capital market are two important components of the financial system. The main difference between them lies in the types of securities traded and the maturity of the instruments. Money market deals in short-term debt securities with maturities of less than one year, such as Treasury bills, commercial paper, and certificates of deposit. These instruments are highly liquid and considered to be low-risk investments. Money market provides a platform for companies and governments to raise short-term funds to meet their operating expenses. On the other hand, capital market deals in long-term securities with maturities of more than one year, such as stocks and bonds. These instruments are considered to be riskier than money market instruments but offer higher returns. Capital market provides a platform for companies to raise long-term funds for major investments and expansion projects. In summary, money market is used for short-term borrowing and investing, while capital market is used for long-term borrowing and investing. Both markets play critical roles in the economy by facilitating the flow of funds between investors and borrowers.