Question
1. The financial crisis of 2007 - 2010s originated in which country? Japan England The United States of America Russia 2 During the financial crisis
1.
The financial crisis of 2007 - 2010s originated in which country?
Japan
England
The United States of America
Russia
2
During the financial crisis of 2007 - 2008, which financial instruments were critical for the build-up of the crisis?
Treasury bills
S&P stocks
Mortgage-backed securities
Government bonds
3.
Which of the following was NOT a countermeasure implemented to address the Global Financial Crisis in 2007-2008?
Buying shares on the stock exchange
Buying government bonds
Cutting policy rates
Allowing tax rebates for low and middle-income US households
4.
Which of the following was a reason for the relatively good performance of the Australian economy during the Global Financial Crisis?
Australian banks did not hold large amounts of US mortgage-backed securities and related assets.
Australian banks could borrow easily from the Reserve Bank which helped cover their short-term liabilities.
Australia's housing market was highly regulated by the government which exempted it from housing market bubbles.
Australia was a closed market and did not trade with the rest of the world.
5.The Commonwealth government responded to the financial crisis by:
lending more to banks and other financial institutions to help them cover their short-term liabilities.
aggressively cutting the cash rate target.
giving out cash bonuses for low income earners.
de-valuing the Australian dollar to keep the export sector strong.
6.
One of the biggest U.S. investment banks that collapsed during the financial crisis of 2007-2008 and filed the largest bankruptcy in U.S. history was:
Lehman Brothers.
Arthur Andersen.
Bank of America.
Morgan Stanley.
7.
Which one of the following was NOT a cause for the GFC?
The bonuses paid to employees of pension funds
Easy availability of mortgages
The possibility of mortgages being sold on by the original lenders increased the lenders' willingness to lend
The increasing complexity and interconnectivity of financial instruments
8.
The Federal Reserve and other central banks allowed commercial banks to borrow with fewer restrictions so that:
banks could cover their short-term liabilities during the credit-crunch period.
banks could lend more to households in order to encourage more household spending, which could help stimulate the economy.
the lack of liquidity in the financial market could be eased.
9.
Which of the following statements is NOT correct about Australia's economy during the GFC?
The unemployment rate in Australia remained the same during the crisis
The Australian economy was mildly affected by the financial crisis
Lending standards in Australia was more prudent with very few mortgages considered subprime
Australia's housing market did not experience any extended bubble or boom prior to the crisis
10.
According to the AS-AD framework, what would be the impact of the crisis on the economy equilibrium (assuming that the monetary and fiscal policy stances are unchanged)?
Lower output; higher inflation
Higher output; higher inflation
Lower output; lower inflation
Higher output; lower inflation
11.
Which of the following best describes subprime mortgage lending?
A bank lending to people who are not their customers
Lending to people who do not have a bank account
Lending to people who are at greater risk of being unable to meet their repayments
Lending on overvalued properties
12.
Regarding the shadow banking system, which of the following statements is correct?
Financial institutions in this system are not subject to banking regulations and safeguards intended for commercial banks
They were conducted by a group of commercial banks which issued mortgage-backed securities
They were conducted by a group of commercial banks which made risky short-term borrowings and lending
Banks in this system do not take deposits but are subject to banking regulations and safeguards intended for commercial banks
13.
Following the onset of the global financial crisis in 2007-2008, governments in the U.S., the U.K. Japan and subsequently in the Eurozone embarked on a policy of quantitative easing (QE).
Usually, this would involve these governments doing which of the following?
Sell government bonds
Buy government bonds
Buy shares on the stock exchange
Make mortgages on houses easier to obtain
14.
Which of the following indicated a mild negative impact of the financial crisis on the Australian economy?
The total amount of Australian banks' non-performing assets decreased
Inflation rate increased and was above the Reserve Bank's target
Unemployment rate remained unchanged during the period of the financial crisis
Real output only decreased by 0.7% in the 4th quarter of 2008.
15.
Consider our AS-AD framework in the context of the Global Financial Crisis.
If the AD shifted rightward, what would be the impact of the implemented monetary and fiscal policies in response to the crisis, particularly to the AS curve?
AS curve shifted rightward
AS curve remains unchanged
AS curve shifted leftward
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