Question 1 A bank holding just over the minimum level of cash reserves with a high volume of loans made to developing countries and a large share of assets in the form of loans to more stable domestic industries and households should receive_ Not yet answered Select one: Points out of 1.00 O a. no scrutiny. Flag O b. decreased scrutiny by bank regulators. question O c. increased scrutiny by bank regulators O d. no different scrutiny by bank regulators. Question 2 Bank regulation requires that banks Not yet answered Select one: Paints out of 1.00 O a. invest in only low-risk stock market portfolios. Flag O b. do not charge interest rates higher than 15% question c. maintain a minimum net worth in order to protect depositors and creditors. O d. hold at least half of their deposits on hand as reserves, to cover necessary withdrawals. Question 3 Bank supervision consists mostly of Not yet answered Select one: Points out of 1.00 O a. setting maximum reserve requirements, net worth requirements and investment levels. F Flag O b. setting minimum reserve requirements, ensuring bank net worth remains positive, and setting restrictions on investments. question O c. setting maximum reserve requirements, setting bank capital requirements, and setting restrictions on types of loans a bank can make. O d. adjusting reserve requirements, setting bank liability requirements, and monitoring risky investments. Question 4 Banks that engage in riskier lending activities may reduce their odds of facing a bank run if they Not yet answered Select one: Points out of 1.00 O a. raise the interest rates they pay to savers. Flag O b. borrow funds to invest more question O c. keep more of their assets in reserves. O d. reduce their holdings of US Treasuries. Question 5 Ceteris paribus, a reduction in the federal funds rate affects car loan rates in the following manner Not yet answered Select one: Points out of 1.00 O a. Car loan rates will increase. F Flag O b. Car loan rates will decrease. question O c. it is other interest rates such as interest on car loans and home improvement that determine the federal funds rate. O d. Car loan rates will stay the same.Question 11 If a macroeconomy has the money supply and aggregate demand increased by the Central Bank, what monetary policy is the Central Bank following? Not yet answered Select one: Points out of 1.00 O a. A contractionary monetary policy. Flag O b. An expansionary fiscal policy question O c. An expansionary monetary policy. O d. A tight monetary policy. Question 12 If the central bank raises the reserve requirement on deposits Not yet answered Select one: Points out of 1.00 O a. the money supply and interest rates decrease. F Flag O b. the money supply and interest rates increase question O c. the money supply decreases and interest rates increase. O d. the money supply increases and interest rates decrease. Question 13 If the Fed increases the discount rate, then Key Bank will Not yet answered Select one: Points out of O a. decrease its reserves. 1.00 Flag O b. make more loans question O c. decrease the interest rates it charges its customers. O d. increase its reserves. Question 14 If the Fed raises reserves requirements, then interest rates will and the money supply will Not yet answered Select one Points out of 1.00 O a. fall; increase. O b. rise; decrease Flag question O c. Rise, will not change O d. be unaffected; decrease. Question 15 If the Fed wants to decrease the quantity of money in the economy, it can Not yet answered Select one: Points out of O a. lower the discount rate. 1.00 O b. sell bonds Flag question O c. lower the reserve requirement. O d. buy bonds9 L uoneeng If the Fed wants to increase the quantity of money in the economy, it can Not yet answered Select one Points out of 1.00 O a. raise the reserve requirement. Flag O b. raise the discount rate. question O c. lower the reserve requirement. O d. buy government securities Question 17 If the Federal Reserve did not regulate monetary policy, monitor banks and provide services for banks, what would most likely be the economic conditions to transact business in the U.S.? Not yet answered Select one: Points out of O a. The economy would be less efficient and transactions most likely more costly. 1.00 Flag O b. There would be no discrimination in lending by local banks. question O c. Banking activities would be less risky. O d. The economy would primarily be based on a barter system rather than a fiat system. Question 18 In order to the money supply, the federal reserve should _ bonds in open market operations. Not yet answered Select one Points out of 1.00 O a. increase; sell Flag O b. decrease; buy question O c. increase; issue O d. increase; buy Question 19 In the scenario where the Central Bank creates policies which increase the money supply but the aggregate demand is unchanged, is created by following what type of monetary policy? Not yet answered Select one: Points out of 1.00 O a. An expansionary policy. Flag O b. A balanced policy question O C. A contractionary policy. Question 20 Moral hazard is associated with which of the following Federal Reserve bank functions? Not yet answered Select one: Points out of 1.00 O a. Open market operations Flag O b. FDIC uogsant O c. Lender of last resort O d. reserve requirements.Question 26 A contractionary monetary policy reduces GDP by Not yet answered Select one: Points out of O a. lowering interest rates and encouraging investment and consumption spending. 1.00 Flag O b. raising interest rates and discouraging investment and consumption spending. wogsanh O c. raising interest rates and encouraging investment and consumption spending. O d. lowering interest rates and discouraging investment and consumption spending. Previous pageQuestion 29 A decision by the Federal Reserve to change reserve requirements for banks is an example of: Not yet answered Select one: Points out of 1.00 O a. monetary policy. Flag O b. government executive policy. question O c. fiscal policy. O d. federal budget policy. Previous pageQuestion 6 Financial contagion may results in lost integrity in the entire financial system. To prevent this from happening, the Fed may Not ye answered Select one: Points out of 1.00 O a. forgive banks liabilities. Flag O b. act as the lender of last resort to make short-term emergency loans, as needed. question O c. act as the lender of last resort to decrease the money supply. O d. consult with private deposit insurance programs to cover the losses of insolvent banks. Question / How do central bank policies affect interest rates? Not yet answered Select one: Points out of 1.00 O a. When the central bank decides to increase the discount rate, interest rates will initially increase, and then decrease in the long run. Flag O b. When the central bank decides to increase the discount rate, then other interest rates increase. question O c. When the central bank decides to increase the discount rate, its member banks will borrow more from the central bank. O d. When the central bank decides to decrease the discount rate, then other interest rates increase. Question 8 How does monetary policy affect the market? Not yet answered Select one: Points out of 1.0 O a. Monetary policy has an indirect impact on aggregate demand Flag O b. Monetary policy has a more of an impact on government spending than investment. question O c. Monetary policy has a direct impact on aggregate demand. O d. Monetary policy has a more of an impact on consumption than investment. Question 9 How many regional Federal Reserve banks are there in the U.S. who primarily support banks and the economy within their respective districts? Not yet answered Select one: Points out of O a. 12 1.00 Flag Ob. 6 question O c. 25 O d. 7 OL uonsend If a bank does not have enough assets to pay back its liabilities, then Not yet answered Select one: Paints out of 1.00 O a. it has positive net worth. Flag O b. the bank is solvent. question O c. the bank is insolvent. O d. the bank can avoid bankruptcy