Question
QUESTION 13 In reaction to the COVID-19 crisis, to prevent bank runs, the FDIC increased its deposit insurance limit to $400,000. True False QUESTION 14
QUESTION 13
In reaction to the COVID-19 crisis, to prevent bank runs, the FDIC increased its deposit insurance limit to $400,000.
True
False
QUESTION 14
Base your answers on the March 03, 2020 Federal Reserve issues FOMC statement
https://www.federalreserve.gov/newsevents/pressreleases/monetary20200303a.htm
The risks posed by the corona virus to the economy of the United States prompted the FOMC to make interest free loans to all banks in the United States.
True
False
QUESTION 16
Base your answers on the March 03, 2020 Federal Reserve issues FOMC statement
https://www.federalreserve.gov/newsevents/pressreleases/monetary20200303a.htm
The risks posed by the corona virus to the price stability and full employment in the United States prompted the FOMC to lower the target Fed Funds rate by 50 basis points to a range of 1% to 1.25%.
True
False
QUESTION 17
Bank W borrows $10 million from the Federal Reserve and lends out $8 million to firm X and keeps $2 million in vault cash. Firm X deposits $6 million in a checking account at Bank Y and bank Y lends out $5 million to Firm Z. Firm Z buys farm equipment with the $5 million. The farm equipment company spends the $5 million money on parts, rent, labor, interest and dividends.$4 million of the money spent on farm equipmentends up in checking accounts at various banks. The initial loan to bank W by the Fed:
Increased the money supply by more than $10,000,000.
Increased the money supply by less than $10,000,000.
Did not change the money supply.
Loans to banks by the Fed are not open market operations so they do not increase the money supply.
QUESTION 18
The following statement makes sense:
In reaction to the COVID-19 crisis the FOMC has made a commitment to reduce the SOMA of the Federal Reserve in order to pump more money into the financial system.
True
False
QUESTION 19
A portion of the commercial and industrial loan portfolio on the balance sheet of Dime Community Bancshares on December 31st, 2020 were composed of Paycheck Protection Loans.
True
False
QUESTION 20
Between February 1st and March 20th, the supply of M1 in the economy has declined due to the COVID-19 crisis.
True
False
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