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Chapter 1 Quize Q & A - Keys
Money And Banking (Saint Paul College)
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CHAPTER 1
TRUE/FALSE QUESTIONS
(T) 1. The purpose of the financial system is to bring savers and borrowers together.
(F) 2. Businesses are never deficit spending units (DSUs).
(T) 3. A financial claim is an “IOU” from a deficit spending unit.
(T) 4. Investment bankers help deficit spending units (DSUs) bring new primary
security issues to market.
(F) 5. Deposits in a credit union by a household are an example of direct finance.
(F) 6. Most banks are considered systemically risky under the 2010 Dodd Frank bill.
(F) 7. Sales finance companies specialize in mortgage lending.
(F) 8. Finance companies take small consumer deposits and make large consumer
loans.
(T) 9. Liabilities of financial intermediaries often include commercial paper.
(T) 10. Direct finance requires a more or less exact match of preferences between DSUs
and SSUs
(F) 11. In the modern financial system, there must be an equal number of DSUs and
surplus spending units (SSUs) in a period.
(T) 12. Every financial claim appears on two balance sheets.
(T) 13. Without a financial sector, real investment must be financed internally by the
deficit spending unit.
(T) 14. Depository intermediaries issue claims that are for the most part highly liquid.
(T) 15. A household is a surplus spending units when income for the period exceeds
spending.
(F) 16. A surplus spending unit (SSU) must hold a claim until its scheduled maturity.
(T) 17. Pension funds transfer spending power from the work period to the retirement
period.
(T) 18. SSUs may prefer intermediated financing to direct financing if they are seeking
liquidity and safety for their investments.
(T) 19. Commercial banks often lend to businesses in direct financial markets.
(F) 20. “Futures contract” and “forward contract” are identical terms.
1
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Chapter 1 Quize Q & A - Keys
Money And Banking (Saint Paul College)
Scan to open on Studocu
Studocu is not sponsored or endorsed by any college or university
Downloaded by kuchy kuchy ()
, lOMoARcPSD|53991452
CHAPTER 1
TRUE/FALSE QUESTIONS
(T) 1. The purpose of the financial system is to bring savers and borrowers together.
(F) 2. Businesses are never deficit spending units (DSUs).
(T) 3. A financial claim is an “IOU” from a deficit spending unit.
(T) 4. Investment bankers help deficit spending units (DSUs) bring new primary
security issues to market.
(F) 5. Deposits in a credit union by a household are an example of direct finance.
(F) 6. Most banks are considered systemically risky under the 2010 Dodd Frank bill.
(F) 7. Sales finance companies specialize in mortgage lending.
(F) 8. Finance companies take small consumer deposits and make large consumer
loans.
(T) 9. Liabilities of financial intermediaries often include commercial paper.
(T) 10. Direct finance requires a more or less exact match of preferences between DSUs
and SSUs
(F) 11. In the modern financial system, there must be an equal number of DSUs and
surplus spending units (SSUs) in a period.
(T) 12. Every financial claim appears on two balance sheets.
(T) 13. Without a financial sector, real investment must be financed internally by the
deficit spending unit.
(T) 14. Depository intermediaries issue claims that are for the most part highly liquid.
(T) 15. A household is a surplus spending units when income for the period exceeds
spending.
(F) 16. A surplus spending unit (SSU) must hold a claim until its scheduled maturity.
(T) 17. Pension funds transfer spending power from the work period to the retirement
period.
(T) 18. SSUs may prefer intermediated financing to direct financing if they are seeking
liquidity and safety for their investments.
(T) 19. Commercial banks often lend to businesses in direct financial markets.
(F) 20. “Futures contract” and “forward contract” are identical terms.
1
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