Econ Final ch. 11

1) The shadow banking system refers to A) commercial banks. B) community banks. C) pawn shops and institutions that offer payday loans. D) nonbank financial institutions such as investment banks and hedge funds.

D

10) All of the following are new rules affecting the shadow banking system as a result of the Dodd-Frank Act EXCEPT A) some trading of derivatives are required to take place on exchanges. B) large hedge funds are required to register with the SEC. C) firms selling mortgage-backed securities and similar assets are required to hold 5% of the credit risk. D) securitized loans must now be insured.

D

4) Which of the following is NOT a form of a short-term loan in the shadow banking system? A) repurchase agreements B) commercial paper C) money market mutual fund shares D) bank deposits

D

12) As a result of the financial crisis of 2007-2009, the size of the shadow banking system A) became smaller than the commercial banking system. B) became larger than the commercial banking system. C) declined, but remained larger than the commercial banking system. D) increased, but remained smaller than the commercial banking system.

C