31 Jan Assume that a bank receives

Quiz 2

Question 1

The issuing of new securities, mortgages, and other claims to wealth takes place in the:

Question 2

Programs passed by the federal government in response to the financial crisis of 2007-2009 include which of the following:

Question 3

The primary goal of the financial manager of a profit-seeking organization is to:

Question 4

Maximizing _____________________ is accomplished through effective financial planning and analysis, asset management, and the acquisition of financial capital.

Question 5

Crucial elements of well-developed financial systems include all of the following except:

Question 6

Economists use a ___________________ framework to explain how the prices and quantities of goods and services are determined in a free-market economic system.

Question 7

$1,000 invested today at 6% interest would be worth ________ one year from now

Question 8

The effect of an increase of required reserves by the Fed is

Question 9

The least used monetary policy instrument used by the Fed is

Question 10

The Federal Reserve Banks are owned by

Question 11

The five components of the Federal Reserve System include:

Question 12

When the Federal Reserve System was created, it was thought that its most important influence over monetary conditions would be

Question 13

Open market operations

Question 14

Under the authority of the Federal Reserve Act of 1913

Question 15

A primary focus of the Economic Stabilization Act of 2008, which became known as the ___________________________, was to allow the U.S. Treasury purchase up to $700 billion of troubled or toxic assets held by financial institutions.

Question 16

Currently, the backing for Federal Reserve’s notes is primarily in the form of

Question 17

Deposits that add new reserves to the bank where they are deposited are called

Question 18

Assume that a bank receives a primary deposit of $1,000, and the reserve requirement is 15%. Which of the following would reflect the asset side of the balance sheet after a maximum loan amount has just been made?

Question 19

Federal Reserve open market operations

Question 20

Assume that a banking system must keep reserves of 20% against deposits. The bank receives a primary deposit of $20,000. What would be the maximum amount of loan that could be made by the system?