Question
1. A bank fails when the value of its ________ falls below the value of ________, causing the bank to become insolvent. A) reserves; required
1. A bank fails when the value of its ________ falls below the value of ________, causing the bank to become insolvent.
A) reserves; required reserves
B) loans; secondary reserves
C) securities; deposit liabilities
D) assets; liabilities
2. The Federal Reserve Act of 1913 required that
A) state banks be subject to the same regulations as national banks.
B) national banks establish branches in the cities containing Federal Reserve banks.
C) national banks join the Federal Reserve System.
D) all of the above be done.
3. With the creation of the Federal Deposit Insurance Corporation,
A) member banks of the Federal Reserve System were given the option to purchase FDIC insurance for their depositors, while nonmember commercial banks were required to buy deposit insurance.
B) member banks of the Federal Reserve System were required to purchase FDIC insurance for their depositors, while nonmember commercial banks could choose to buy deposit insurance. C) both member and nonmember banks of the Federal Reserve System were required to purchase FDIC insurance for their depositors.
D) both member and nonmember banks of the Federal Reserve System could choose, but were not required, to purchase FDIC insurance for their depositors.
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