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Question 2: 1.) A surplus spending unit is one whose Income and expenditures for the period are equal. Income for the period exceeds consumption and
Question 2:
1.) A surplus spending unit is one whose
- Income and expenditures for the period are equal.
- Income for the period exceeds consumption and real investment expenditures.
- Expenditures for the period exceed receipts.
- Uses credit cards for all consumer purchases.
2.) Which of the following is an example of indirect financing?
- An SSU purchasing a financial claim from a DSU.
- An SSU purchasing a financial claim from a dealer.
- An SSU purchasing a financial claim from a commercial banker.
- An SSU purchasing a financial claim from an underwriter.
3.) Financial institutions facilitate the flow of funds
- From savers to borrowers by buying the direct securities of borrowers and issuing indirect liability claims to savers.
- By issuing direct financial claims to savers and purchasing the indirect securities of borrowers.
- By bringing savers and borrowers together for a fee.
- By keeping their underwriting spread at a reasonable cost.
4.) Most financial intermediaries:
- Issue direct claims and purchase direct financial assets.
- Issue indirect claims and purchase indirect financial assets.
- Purchase large amounts of real, tangible assets.
- Purchase direct financial claims and issue indirect securities.
5.) Denomination intermediation refers to
- Issuing insured deposits and making risky business loans.
- Issuing two-year CDs and making a 90-day note.
- Issuing $3,000 average balance checking accounts and making $15,000 auto loans.
- Promising redeem ability to SSUs and investing the funds in a one-year business loan.
6.) Surplus spending units (SSU) are also called
- Lenders.
- Borrowers.
- Sellers of securities.
- Balanced budget units.
7.) The ease with which a financial claim can be resold refers to its
- Liquidity.
- Default risk.
- Marketability.
- Redeem ability.
8.) Intermediation financing, also called________financing, involves________financial claims(s) between saver and borrower.
- Indirect; two.
- Direct; two.
- Indirect; one.
- Direct; one.
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