Macro econ chapter 14 multiple choice TB
C. $0.80
Refer to the given table. The value of the dollar in year 2 is A. $ 1.25 B. $1.33 C. $0.80 D. $0.75
A. M1 money supply will decline and the M2 money supply will remain unchanged.
35. Assuming no other changes, if checkable deposits decrease by $40billion and balances in money market mutual funds increase by $40billion, the A. M1 money supply will decline and the M2 money supply will remain unchanged. B. M1 and M2 money supplies will not change. C. M1 money supply will increase and the M2 money supply will remain unchanged. D. M1 and M2 money supplies will both decline.
D. of all of these reasons
Banks lost money during the mortgage default crisis because A. of defaulted loans to investors in mortgage-backed securities. B. they held mortgage-backed securities they had purchased from investment firms. C. homebuyers defaulted on mortgages held by the banks. D. of all of these reasons
B. included both in M1 and in M2.
Coins in people's pockets and purses are A. included in M1 but not in M2. B. included both in M1 and in M2. C. included in M2 but not in M1. D. excluded from M1 and M2 because people can exchange them for Federal Reserve notes.
D. insured holders of loan-backed securities in case the underlying loans were not repaid.
Collateralized default swaps A. helped reduce the losses from the mortgage default crisis. B. involve exchanging high-risk mortgages for low-risk mortgage-backed securities. C. are loans to investors in mortgage-backed securities. D. insured holders of loan-backed securities in case the underlying loans were not repaid.
D. have become increasingly similar in recent years.
Commercial banks and thrift institutions A. differ because thrifts cannot make loans. B. differ because thrifts cannot offer checkable deposits. C. have become less similar in recent years. D. have become increasingly similar in recent years.
B. 43 percent of the U.S. M1 money supply.
Currency (paper money plus coins) constitutes about A. 25 percent of the U.S. M1 money supply. B. 43 percent of the U.S. M1 money supply. C. 57 percent of the U.S. M1 money supply. D. 66 percent of the U.S. M1 money supply.
A. a medium of exchange.
If you write a check on a bank to purchase a used Honda Civic, you are using money primarily as A. a medium of exchange. B. a store of value. C. a unit of account. D. an economic investment.
B. About 6000
Approximately how many commercial banks are now(2016) operating in the United States? A. About 7300 B. About 6000 C. About 8500 D. About 6800
B. M2 only.
"Near monies" are included in A. both M1 and M2. B. M2 only. C. M1 only. D. neither M1 nor M2.
A. included in M1.
Checkable deposits are A. included in M1. B. not included in either Ml or M2. C. considered to be a near money. D. also called time deposits.
D. not part of the nation's money supply.
Coins held in commercial bank vaults are A. included in M1 but not in M2. B. included both in M1 and in M2. C. included in M2 but not in M1. D. not part of the nation's money supply.
D. neither the M1 nor the M2 definition of the money supply.
Currency held within banks is part of A. both the M1 and M2 definitions of the money supply. B. the M2 definition of the money supply only. C. the M1 definition of the money supply only. D. neither the M1 nor the M2 definition of the money supply.
D. both M1 and M2.
Currency in circulation is part of A. M1only. B. M2 only. C. neither M1 nor M2. D. both M1 and M2.
D. Troubled Asset Relief Program
TARP, created in 2008, stands for A. Toxic Asset Relief Program B. Troubled Asset Recovery Plan C. Toxic Asset Reinvestment Policy D. Troubled Asset Relief Program
A. appointed by the president with the confirmation of the Senate.
The seven members of the Board of Governors of the Federal Reserve System are A. appointed by the president with the confirmation of the Senate. B. elected by Congress from a slate of nominees provided by the president. C. appointed by the Senate Finance Committee. D. appointed by the presidents of the 12 Federal Reserve Banks.
A. Buyers owe more on their mortgage than the properties are worth.
What does it mean when the economists say that home buyers are "underwater" on their mortgages? A. Buyers owe more on their mortgage than the properties are worth. B. Buyers are financially incapable of repaying their mortgages and bankruptcy is inevitable. C. Buyers are purchasing homes on flood plains and are highly susceptible to financial losses. D. Buyers are paying interest rates substantially higher than current market interest rates, creating interest payments that create financial hardship.
A. high-interest-rate loans to home buyers with above-average credit risk
"Subprime mortgage loans" refer to A. high-interest-rate loans to home buyers with above-average credit risk. B. home-buying loans that charge interest rates below the prime interest rate. C. loans to buyers of homes that are in need of substantial repair. D. loans from the Federal Reserve to home mortgage lenders to support a greater volume of home-buying loans at affordable interest rates.
A. Merrill Lynch
Which of the following financial institutions was acquired by Bank of America as a result of the financial crisis of 2007 and 2008? A. Merrill Lynch B. Lehman Brothers C. Goldman Sachs D. AIG
D. large-denominated time deposits
Which of the following is not part of the M2 money supply? A. money market mutual fund balances B. money market deposit accounts C. currency D. large-denominated time deposits
A. they are privately owned but managed in the public interest.
To say that the Federal Reserve Banks are quasi-public banks means that A. they are privately owned but managed in the public interest. B. they deal only with banks of foreign nations and do not have direct business contact with U.S.banks. C. they deal only with commercial banks, and not the public. D. they are publicly owned but privately managed.
A. It is backed by gold.
Which of the following does not explain what backs the money supply in the United States? A. It is backed by gold. B. It is widely accepted in transactions. C. It is designated "legal tender" by the federal government. D. It is relatively scarce.
B. Lehman Brothers
Which of the following financial institutions declared bankruptcy as a result of the financial crisis of 2007 and 2008? A. Merrill Lynch B. Lehman Brothers C. Goldman Sachs D. AIG
C. controlling the supply of money
Which of the following is the basic economic policy of the federal reserve bank? A. holding the deposits or reserves of commercial banks B. acting as fiscal agents for the federal government C. controlling the supply of money D. collecting or clearing checks among commercial banks
A. they can be readily used in purchasing goods and paying debts.
Checkable deposits are classified as money because A. they can be readily used in purchasing goods and paying debts. B. banks hold currency equal to the value of their checkable deposits. C. they are ultimately the obligations of the Treasury. D. they earn interest income for the depositor.
B. the deposits of banks and thrifts on which checks can be written.
Checkable deposits include A. both large- and small-denominated time deposits. B. the deposits of banks and thrifts on which checks can be written. C. only the checkable deposits of commercial banks. D. only the checkable deposits of thrift institutions.
D. not counted as part of the money supply.
Currency held in the vault of First National Bank is A. counted as part of M1. B. counted as part of M2 but not M1. C.only counted as part of M1 if it was deposited into a checking account. D. not counted as part of the money supply.
C. bundling groups of loans, bonds, mortgages, and other financial debts into new securities.
In the financial industry, "securitization" refers to A. increasing insurance protection on bank deposits. B. requiring greater down payments on home purchases to reduce mortgage default risk. C. bundling groups of loans, bonds, mortgages, and other financial debts into new securities. D. increasing collateral requirements on loans.
A. by the government's ability to control the supply of money and therefore to keep its value relatively stable.
The money supply is backed A. by the government's ability to control the supply of money and therefore to keep its value relatively stable. B. by government bonds. C. dollar-for-dollar by gold and silver D. by gold reserves representing a fraction of the total value of dollars in circulation.
C. less liquid than the M1 components of M2.
The near money components of M2 are A. equally liquid as the M1 components of M2. B. more liquid than the M1 components of M2. C. less liquid than the M1 components of M2. D. highly illiquid.
D. Federal Reserve notes.
The paper money used in the United States is A. National Bank notes. B. Treasury notes. C. United States notes. D. Federal Reserve notes.
A. inversely.
The purchasing power of money and the price level vary A. inversely. B. directly during recessions but inversely during inflations. C. directly but not proportionately. D. directly and proportionately.
D. is the reciprocal of the price level.
The purchasing power of the dollar A. has been increasing in recent years because of economic growth. B. varies directly with the cost-of-living index. C. is inversely related to the level of aggregate demand. D. is the reciprocal of the price level.
A. inversely with the price level.
The value of money varies A. inversely with the price level. B. directly with the volume of employment. C. directly with the price level. D. directly with the interest rate.
B. their face value is greater than their intrinsic value.
To say that coins are "token money" means that A. their face value is less than their intrinsic value. B. their face value is greater than their intrinsic value. C. their face value is equal to their intrinsic value. D. they are not legal tender.
D. because people and businesses will not want to accept it in transactions.
During periods of rapid inflation, money may cease to work as a medium of exchange A. unless it has been designated legal tender. B. unless it is backed by gold. C. because it is too scarce for everyone to have enough for transactions. D. because people and businesses will not want to accept it in transactions.
D. 1913
The federal reserve system was created in A. 1926 B.1946 C. 1895 D. 1913
B. M1 money supply will not change.
34. Assuming no other changes, if checkable deposits increase by $40billion and currency in circulation decreases by$40billion, the A. M1 money supply will decline. B. M1 money supply will not change. C. M2 money supply will decline. D. M2 money supply will increase.
D. will fall by 20 percent.
56. If the price index rises from 200 to 250, the purchasing power value of the dollar A. may either rise or fall. B. will rise by 25 percent. C. will fall by 25 percent. D. will fall by 20 percent.
D. Federal Reserve note.
A $20 bill is a A. gold certificate. B. Treasury note. C. Treasury bill. D. Federal Reserve note.
A. unit of account.
A $70 price tag on a sweater in a department store window is an example of money functioning as a A. unit of account. B. standard of deferred payments. C. store of value. D. medium of exchange.
C. performs the functions of money.
A checking account entry is money because it A. is ensured by the Federal Deposit Insurance Corporation. B. has been declared as such by the federal government. C. performs the functions of money. D. can be sold for currency.
D.provide facilities by which commercial banks and thrift institutions may collect checks.
An important routine function of the federal Reserve Bank is to A. supervise the liquidation of the assets of bankrupt state banks. B. help large commercial banks develop correspondent relationships with smaller commercial banks. C. advise commercial banks as to the most profitable ways of reinvesting profits. D.provide facilities by which commercial banks and thrift institutions may collect checks.
A. Federal Open Market Committee
As it relates to Federal Reserve Activities, the acronym FOMC describes the A. Federal Open Market Committee B. Federal Options Market Committee C. Federal Organization for Monetary Control D. Federal Organization for Money Creation
B. $3,105 billion.
As of February 2016, the supply of money(M1) in the United States was about A. $2,472 billion. B. $3,105 billion. C. $1,359 billion. D. $12,479 billion.
A. M1 and M2 money supplies will not change.
Assuming no other changes, if balances in money market deposit accounts increase by $50billion and small-denominated time deposits decrease by $50 billion, the A. M1 and M2 money supplies will not change. B. M2 money supply will increase. C. M1 money supply will decline. D. M2 money supply will increase and the M1 money supply will decrease.
B. the FDIC closed more than 200 U.S. banks and shifted their deposits to other banks.
Between September 2007 and September 2009, A. the Fed oversaw the conversion of all thrifts into commercial banks. B. the FDIC closed more than 200 U.S. banks and shifted their deposits to other banks. C. the Fed increased capital requirements for larger financial institutions in an effort to reduce moral hazard. D. the FDIC paid out more than $500 billion to depositors who held money in failed banks.
A. coins, paper currency, and checkable deposits.
In the United States, the money supply(M1) includes A. coins, paper currency, and checkable deposits. B. currency, checkable deposits, and Series E bonds. C. coins, paper currency, checkable deposits, and credit balances with brokers. D. paper currency, coins, gold certificates, and time deposits.
B. $700 billion
How much did the US Congress allocate to the Troubled Asset Relief Program in 2008? A. $170 billion B. $700 billion C. $787 billion D. $885 billion
B. $V=1/P.
If P equals the price level expressed as an index number and $V equals the value of the dollar, then A. P = $V − 1. B. $V=1/P. C. 1 = $V/P. D.$V = P − 1
C. will fall by one-sixth.
If the price index rises from 100 to 120, the purchasing power value of the dollar A. may either rise or fall. B. will rise by one-sixth. C. will fall by one-sixth. D. will rise by 20 percent.
C. a unit of account.
If you are estimating your total expenses for school next semester, you are using money primarily as A. a medium of exchange. B. a store of value. C. a unit of account. D. an economic investment.
B. store of value.
If you place a part of your summer earnings in a savings account, you are using money primarily as a A. medium of exchange. B. store of value. C. unit of account. D. standard of value.
C. they are not directly or immediately a medium of exchange.
In defining money as M1, economists exclude time deposits because A. the intrinsic value of time deposits is nil. B. the purchasing power of time deposits is much less stable than that of checkable deposits and currency. C. they are not directly or immediately a medium of exchange. D. they are not recognized by the federal government as legal tender
B. Federal Reserve System
In the US economy, the money supply is controlled by the A. US treasury B. Federal Reserve System C. Senate Committee on Banking and Finance D. Congress
D. a store of value, a unit of account, and a medium of exchange.
Money functions as A. a store of value. B. a unit of account. C. a medium of exchange. D. a store of value, a unit of account, and a medium of exchange.
B. M2 only.
Money market deposit accounts are included in A. M1 only. B. M2 only. C. neither M1 nor M2. D. both M1 and M2.
B. are certain highly liquid financial assets that do not function directly as a medium of exchange but can be readily converted into M1.
Near monies A. include all financial and real assets that can be easily converted into currency. B. are certain highly liquid financial assets that do not function directly as a medium of exchange but can be readily converted into M1. C. are excluded from M2 because they are highly liquid. D. are defined as monetary balances that are immediately available, at zero cost, for household and business transactions.
B. decrease the purchasing power of each dollar.
Other things equal, an excessive increase in the money supply will A. increase the purchasing power of each dollar. B. decrease the purchasing power of each dollar. C. have no impact on the purchasing power of the dollar. D. reduce the price level.
B. Federal Reserve Banks.
Paper money (currency) in the United States is issued by the A. U.S. Mint. B. Federal Reserve Banks. C. U.S. Treasury. D. national banks.
C. medium of exchange.
Purchasing groceries using a debit card best exemplifies money serving as a A. store of value. B. unit of account. C. medium of exchange. D. index of satisfaction.
A. items 1,5,9, and 10
Refer to the given list of assets. 1. Large-denominated ($100,000 and over) time deposits 2. Noncheckable savings deposits 3. Currency (coins and paper money) in circulation 4. Small-denominated (under $100,000) time deposits 5. Stock certificates 6. Checkable deposits 7. Money market deposit accounts 8. Money market mutual fund balances held by individuals 9. Money market mutual fund balances held by businesses 10. Currency held in bank vaults. The assets that are NOT included in either M1 or M2 are A. items 1,5,9, and 10 B. items 2, 5, 8, and 9 C. items 1,3,5,7, and 9 D. all of the 10 items listed.
C. items 2,4,7, and 8
Refer to the given list of assets. 1. Large-denominated ($100,000 and over) time deposits 2. Noncheckable savings deposits 3. Currency (coins and paper money) in circulation 4. Small-denominated (under $100,000) time deposits 5. Stock certificates 6. Checkable deposits 7. Money market deposit accounts 8. Money market mutual fund balances held by individuals 9. Money market mutual fund balances held by businesses 10. Currency held in bank vaults. Which of the following are considered to be near monies? A. items 2,5,8, and 9 B. all items except 3 C. items 2,4,7, and 8 D. items 1,5, and 10
C. 3 and 6
Refer to the given list of assets. 1. Large-denominated ($100,000 and over) time deposits 2. Noncheckable savings deposits 3. Currency (coins and paper money) in circulation 4. Small-denominated (under $100,000) time deposits 5. Stock certificates 6. Checkable deposits 7. Money market deposit accounts 8. Money market mutual fund balances held by individuals 9. Money market mutual fund balances held by businesses 10. Currency held in bank vaults. The M1 definition of money includes item(s) A. 6 only B. 3,4, and 6 C. 3 and 6 D. 3, 6, and 10
C. items 2,3,4,6,7, and 8
Refer to the given list of assets. 1. Large-denominated ($100,000 and over) time deposits 2. Noncheckable savings deposits 3. Currency (coins and paper money) in circulation 4. Small-denominated (under $100,000) time deposits 5. Stock certificates 6. Checkable deposits 7. Money market deposit accounts 8. Money market mutual fund balances held by individuals 9. Money market mutual fund balances held by businesses 10. Currency held in bank vaults. The M2 definition of money includes item(s) A. items 2,3,4,6,7,8, and 10 B. items 3,4,5, and 6 C. items 2,3,4,6,7, and 8 D. all of the items listed
B. $1.25
Refer to the given table. The value of the dollar in year 3 is A. $1.20 B. $1.25 C. $0.80 D. $1.10
D. $2.00
Refer to the given table. The value of the dollar in year 4 is A. $1.50 B. $0.33 C. $0.50 D. $2.00
C. $130
Refer to the table. Money supply M1 for this economy is A. $60 B. $70 C. $130 D. $140
A. $480
Refer to the table. Money supply M2 for this economy is A. $480 B. $130 C. $490 D. $630
C. $350
Refer to the table. The value of the near monies that are part of M2 is A. $480 B. $630 C. $350 D. $530
B. unit of account.
Stock market price quotations best exemplify money serving as a A. store of value. B. unit of account. C. medium of exchange. D. index of satisfaction.
A. the more independent the central bank, the lower the average annual rate of inflation.
Research for industrially advanced countries indicates that A. the more independent the central bank, the lower the average annual rate of inflation. B. the more independent the central bank, the higher the average annual rate of inflation. C. there is no relationship between the degree of independence of a country's central bank and its inflation rate. D. the more independent the central bank, the higher the average annual rate of unemployment.
D. the less independent the central bank, the higher the average annual rate of inflation.
Research involving industrially advanced countries suggests that A. the more independent the central bank, the lower the average annual growth of real GDP. B. the more independent the central bank, the higher the average annual growth of realGDP. C. there is no relationship between the degree of independence of a country's central bank and the growth rate of its real GDP. D. the less independent the central bank, the higher the average annual rate of inflation.
C. are less than $100,000.
Small-denominated time deposits, by definition A. mature in one month or less. B. mature in one year or less. C. are less than $100,000. D. are held by state and local banks only.
A. Moral Hazard
Some economists are concerned that the financial rescue provided by the TARP will encourage financial investors and firms to take on greater risks int he future.This is an example of A. Moral Hazard B. Adverse selection C. A prisoner's dilema D. shadow banking
C. with both fiscal and monetary policy.
Stabilizing a nation's price level and the purchasing power of its money can be achieved A. only with fiscal policy. B. only with monetary policy. C. with both fiscal and monetary policy. D. with neither fiscal nor monetary policy.
D. All of these are possible outcomes.
Suppose that the federal government suddenly declared that wheat was to be used as money. What is a possible outcome of that decision? A. The value of the "wheat dollar" would be unstable depending on crop yields from year to year. B. Farmers would replace corn and soy crops with wheat. C. Wheat would function as money so long as people accept it in exchange for goods and services. D. All of these are possible outcomes.
C. increased the moral hazard problem by limiting losses from bad financial decisions.
TARP and other lender-of-last-resort programs implemented by the Fed in response to the financial crisis of 2007 and 2008 A. severely depleted the assets of the Federal Reserve. B. have been little used and therefore are ineffective. C. increased the moral hazard problem by limiting losses from bad financial decisions. D. were designed to offset the moral hazard created by the TARP and other bailout programs
B. the process by which securities exchanges provide credit for personal and business needs apart from traditional bank lending.
The "shadow banking system" refers to A. the provision of credit through the underground economy when the financial crisis of 2007 and 2008 occurred. B. the process by which securities exchanges provide credit for personal and business needs apart from traditional bank lending. C. the series of illegal financial transactions that precipitated the financial crisis of 2007 and 2008. D. mortgage loans made to homebuyers who are poor credit risks.
B. 7
The Board of Governors of the Federal Reserve has ___ members A. 5 B. 7 C.9 D. 14
D. the seven members of the Board of Governors of the Federal Reserve System along with the president of the NewYork FederalReserveBank and four other Federal Reserve Bank presidents on a rotating basis.
The Federal Open Market Committee (FOMC) is made up of A. the chair of the Board of Governors along with the 12 presidents of the Federal Reserve Banks. B. the seven members of the Board of Governors along with the president of the New York Federal Reserve Bank. C. the seven members of the Board of Governors of theFederal Reserve System along with the three members of the Council of EconomicAdvisers. D. the seven members of the Board of Governors of the Federal Reserve System along with the president of the NewYork FederalReserveBank and four other Federal Reserve Bank presidents on a rotating basis.
D. individual shares in money market mutual funds.
The M2 money supply includes A. stock certificates. B. currency in bank vaults. C. the cash value of life insurance policies. D. individual shares in money market mutual funds.
B. is larger than the amount reported as M1.
The amount of money reported as M2 A. is smaller than the amount reported as M1. B. is larger than the amount reported as M1. C. excludes coins and currency. D. includes large ($100,000 or more) certificates of deposit.
D. are appointed for 14-year terms.
The members of the Federal Reserve Board A. serve seven-year terms. B. are appointed by the American Economic Association. C. are elected by votes of the 12 presidents of the Federal Reserve Banks. D. are appointed for 14-year terms.
B. Board of Governors of the Federal Reserve.
The central authority of the U.S. banking system is the A. FederalOpenMarketCommittee(FOMC). B. Board of Governors of the Federal Reserve. C. Federal Monetary Authority. D. Council of Economic Advisers.
B. the latter includes small-denominated time deposits, noncheckable savings accounts, money market deposit accounts, and money market mutual fund balances.
The difference between M1 and M2 is that A. the former includes time deposits. B. the latter includes small-denominated time deposits, noncheckable savings accounts, money market deposit accounts, and money market mutual fund balances. C. the latter includes negotiable government bonds .D. the latter includes cash held by commercial banks and the U.S. Treasury
B. is basically an independent agency.
The federal reserve system A. has the same status as the SupremeCourt. B. is basically an independent agency. C. has the status of a congressional committee. D. is an agency of the executive branch of the federal government.
D. Federal Open Market Committee (FOMC)
The group that sets the Federal Reserve System's policy on buying and selling government securities(bills notes, and bonds) is the A. Federal Deposit Insurance Corporation (FDIC) B. Federal Bond Sale Authority C. Council of Economic Advisers D. Federal Open Market Committee (FOMC)
C. checkable deposits.
The largest component of the money supply(M1) is A. currency in bank vaults. B. currency in circulation. C. checkable deposits. D. stock certificates.
D. not a component of M1 or M2.
Time deposits of $100,000 or more are A. a component of M1. B. a component of M2 but not of M1. C. a component of M1 but not of M2. D. not a component of M1 or M2.
B. whatever performs the functions of money extremely well is considered to be money.
To say money is socially defined means that A. money has been defined in a Constitutional amendment. B. whatever performs the functions of money extremely well is considered to be money. C. the money supply includes all public and private securities purchased by society. D.society, acting through Congress, specifies what shall be included in the money supply.
B. bonds backed by mortgage payments
What are "mortgage- backed securities"? A. company stock shares for financial institutions that lend to home buyers B. bonds backed by mortgage payments C. Treasury bills and savings bonds that banks sold to maintain liquidity during the mortgage default crisis D. insurance against mortgage loan defaults
C. a monetary unit for measuring and comparing the relative values of goods.
When economists say that money serves as a unit of account, they mean that it is A. away to keep wealth in a readily spendable form for future use. B. a means of payment. C. a monetary unit for measuring and comparing the relative values of goods. D. declared as legal tender by the government.
D. they reduced their direct exposure to mortgage default risk but were still exposed through loans to investors in mortgage-backed securities.
When banks bundled mortgage loans and sold the resulting mortgage- backed securities, A. they insulated the banking system from any risk associated with mortgage defaults. B. they greatly reduced the overall risk of mortgage defaults. C. buyers of these securities assumed all of the risk of mortgage defaults. D. they reduced their direct exposure to mortgage default risk but were still exposed through loans to investors in mortgage-backed securities.
B. a means of payment.
When economists say that money serves as a medium of exchange, they mean that it is A. away to keep wealth in a readily spendable form for future use. B. a means of payment. C. a monetary unit for measuring and comparing the relative values of goods. D. declared as legal tender by the government.
A. a way to keep wealth in a readily spendable form for future use.
When economists say that money serves as a store of value, they mean that it is A. a away to keep wealth in a readily spendable form for future use. B. a means of payment. C. a monetary unit for measuring and comparing the relative values of goods. D. declared as legal tender by the government.
C. They are privately owned and publicly controlled central banks whose basic goal is to control the money supply and interest rates in promoting the general economic welfare.
Which of the following statements best describes the 12 Federal Reserve Banks? A. They are privately owned and privately controlled central banks whose basic goal is to provide an ample and orderly market for U.S. Treasury securities. B. They are privately owned and publicly controlled central banks whose basic function is to minimize the risks in commercial banking in order to make it a reasonably profitable industry. C. They are privately owned and publicly controlled central banks whose basic goal is to control the money supply and interest rates in promoting the general economic welfare. D. They are privately owned and publicly controlled central banks whose basic goal is to earn profits for their owners
C. Prior to the rise in defaults, banks had become lax in their lending practices, resulting in a large number of bad loans.
Which of the following statements is true about the high rate of mortgage defaults that contributed to the financial crisis of 2007 and 2008? A. High interest rates on mortgage loans were the primary cause of defaults. B. The high rate of defaults occurred despite the efforts of government to discourage new home ownership and slow the growth of the housing bubble. C. Prior to the rise in defaults, banks had become lax in their lending practices, resulting in a large number of bad loans. D. The high rate of defaults resulted primarily from the two years of recession preceding the mortgage default crisis.
C. From February 2008 toMarch 2009, Fed assets more than doubled to nearly $2trillion.
Which of the following statements is true as a result of Federal Reserve efforts to rescue the financial industry from the financial crisis of 2007 and 2008? A. From February 2008 to May 2009, the Fed over saw the consolidation of20 major financial institutions into fewer than a dozen. B. From March 2008 to February 2009, the Fed experienced a 50 percent decline in the value of assets held. C. From February 2008 toMarch 2009, Fed assets more than doubled to nearly $2trillion. D. From February 2008 to March 2009,Fed lending caused the U.S. public debt to rise by over$1trillion.
A. There are 12 regional Federal Reserve Banks.
Which one of the following is true about the U.S. Federal Reserve System? A. There are 12 regional Federal Reserve Banks. B. The head of the U.S. Treasury also chairs the Federal Reserve Board. C. There are 14 members of the Federal Reserve Board. D. The Open Market Committee is smaller in size than the Federal Reserve Board.