1) The process in which financial intermediaries borrow from SSUs and make loans to DSUs is called:

a. Direct financing

b. Indirect financing

c. Incomplete financing

d. Deficit financing

2) Which of the following is usually or always a surplus sector?

I. The household sector

II. The business sector

III. The foreign sector

a. I only

b. I and II only

c. I and III only

d. I, II, and III

3) Which of the following financial markets trades debt securities?

I. The money market

II. The bond market

III. The stock market

a. I only

b. I and II only

c. I and III only

d. I, II, and III