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94 Cards in this Set
- Front
- Back
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how many commercial banks are there and how many were there at one time and why is it decreasing
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7000
20000 bank failures and consolidations |
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creating a bank holding company was a way to ______, what is a holding company
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circumvent branching restrictions
-corporation that owns several different companies |
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what act allows branching by national banks across state lines. what act did it overturn
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riegle-neal interstate banking and branching efficiency act of 94
- mcfadden act |
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what act prohibited commercial banks from participating in underwriting corporate securities or from engaging in brokerage activities
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glass-steagall act
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what was reason for repeal of glass-steagall
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development of mmmf
increased competition american banks at disadvantage relative to foreign banks |
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what regulated:
federal state |
office of thrift supervision
state banking authority |
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what is similar to federal reserve system and how many districts are in it
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federal home loan bank system fhlbs
12 districts |
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what regulated federal credit unions
state credit unions |
national credit union administration
state banking authority |
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when are eurodollars created
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when deposits in accounts in the us are stransferred to abank outside the country and are kept int he form of dollars
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where is the main center of euro dollars and what is minimum transactin
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london
1 million |
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monetary that is overly expansionary (contractionary) can lead to
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inflation which leads to recession
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goals of monetary policy
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price stability
high employment economic growth stability of financial markets interest rate stability stability in foreign exchange markets |
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what is long run primary goal of monetary policy in us and other countries
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price stability
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what is frictional and structural unemployment
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frictional- takes time to find job
structural- mismatch between job requirements and the skills of local worers |
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natural unemployment rate is between?
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4.5 to 6 percent
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historically real gdp has grown at
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3 percent
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interest rate instability (rapid incrase in rates in early 80's) led to severe problems for
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savings and loans
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an increase in value of the dollar hampers
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us exports
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decrease in value of dollar stimulates
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inflation
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how many districts are in fed
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12
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how many branches
what district is lc in what district is albuquerque in |
25
dallas kansas city |
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all national charted banks are members of
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federal reserve
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state chartered banks are not required to be members of
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federal reserve
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most banks are _____chartered
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state
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what percentage of banks are members of the fed
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38
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depository instittution deregulation and monetary control of 1980 did what
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eliminated interest rate ceilings
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how many board of governors of the fed are there
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7 appointed by pres. confirmed by senate
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governors serve a non-renewable ____year term
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14
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chairmans term is ___ years, usually ____ if not reappointed
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4
resign |
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members must come from different ____
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federal districts
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the boards sets ____ requirements
and control the _____ |
reserve
discount rate |
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the members of the board of governors usually serve ..
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less than their 14 year term
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the term "member bank" refers to
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a bank that belongs to the fed system
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there are _____ federal banks in the US
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12
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federal reserve board is headed by a chairman who is appointed by____
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appointed by pres and confirmed by senate
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if the us dollar pricer per peso moves from .12/1 peso to .11/1 peso the peso is said to have _____ and dollar said to have ____
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depreciated; appreciated
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under gold standard, exchange rates were determined by
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governments, when they defined their currency in terms of gold
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cpi is currently close to
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210
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unemployed is currently close to
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10 percent
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us uses dollars. south africa uses
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rand
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real gdp is the value of all _____goods in a given year in ____ prices
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final; base year
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balance of payments is a periodic statement of the ____
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money value of all transactions between residents of one country and residents of other countries
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name three things that are in balance of payment account
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current account
capital account official reserve account |
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name one thing that is not in balance of payment account
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gold account
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expots of goods and services are included in the ___-
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current account
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capital account includes..
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all payments related to the purchase and sale of assets and to borrowing and lending activities (HAS TO DO WITH ASSETS)
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foreign exchange market is the market in which ___
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currencies of different countries are bought and sold
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which of the following exchange rates between the dollar and the peso would a mexican buyer of american goods most prefer
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a) 0.2 equals 1 peso ANSWER
b) 0.15 equals 1 peso c) 0.125 equals 1 peso d) 0.10 equals 1 peso want their currency to be valued the most |
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a person in the civilian labor force falls into one of two categories
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unemployed or employed
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unempolyment rate equals
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unemployed people/civilian labor force
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unemployement due to changes in the types of skills employers require is called ____ unemployment
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structural
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total population is 230 mil
employed persons is 80 mil unemployed persons is 8 mil whats unemployment rate |
8 divided by 88 equals 9.1
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things included in the measurement of gdp
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a bill from car mechanic
wages of a card dealer workin in vegas commissions of a stockbroker |
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thing not included in measurement of gdp
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increased value of shares of stock
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only federal reserve bank with a permanent place on the fomc is
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federal reserve bank of new york
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federal reserves net earnings are mostly turned over to
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US treasury
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if the deposit multiplier is 4, the required reserve ration is 20 percent and the excess reserve ration against demand deposits is 5 percent, the currency ration is
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0 percent
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when the fed sells securities to banks only the ____ side of the balance sheets of banks change
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assets
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monetary base is defined as
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reserves + currency in circulation
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over the last ten years the number of commercial banks in the US has
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decreased
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examples of bank regulatory agencies
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comptroller of currency
federal reserve system federal deposit insurance corporation |
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US banking system has been labled a dual system because
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chartered by both federal and state governments
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the glass stegall act prohibited
1) 2 |
prohibited commercial banks from engaging in underwriting and dealing of corporate securities
prohibited investment banks from engaging in commercial banking activities |
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monetary base is ___ billion
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1750
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sum of vault cash and bank deposits with the fed minus required reserves
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excess reserves
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the simple deposit multipolier is equal to 4 when the required reserve ration is equal to
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1/.25 equals 4
answer = .25 |
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if member of the nonbank public purcahses a government bond from the federal reserve with currency then _____
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monetary base will fall, reserves will remain unchanged
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if federal reserve wants to inject reserves into the banking system it will usually
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purchase government securities
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changes in the reserve requirements are infrequiently used for changing money supply because
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reserve requirements changes tend to be powerful and are costly for banks to adjust to
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in defining money as m1, economists exclude savings deposits on the grounds that
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they are not a medium of exchange
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an increase in the money supply is most likely to.
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lower interest rates and raise investment and spending
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if going rate of interest is 10 percent, the present value of 1000 payable two years from today is
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826
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The demand for money depends positively on income and negatively on the interest rate.
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ANSWERThe demand for money depends positively on income and negatively on the interest rate.
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mmmf's are excluded from
m1 m2 or m 3 |
m1
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mmmf's are excluded from
m1 m2 m3 |
m1
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when the fed raises the discount rate
___yields ____ prices |
increases, reduces
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if expected inflation is 4 percent and the expected real return on your investment then your nominal interest rate is
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9 percent
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a treasury security that has a maturity of 7 years is called a ____
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note
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a bank is offering an interest rate on its one year cd's. It would be reasonable to assume that the prime rate would be ____ 5 percent
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above
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the oldest of the federal reserve policy tools is _____
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discount lending
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the reserve requirements on time deposits is currently
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0 percent
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primary reserves of a comercial bank are
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deposits at the fed bank and vault cash
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what would a bank hold as secondary reserves
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treasury bills
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if income increases demand for income will
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increase
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monetary base does include
1 2 3 |
currency held outside of banks
excess reserves of banks required reserves of banks |
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monetary base does not include
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checkable deposits
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the risk that interest rates will fall causing causing prices of securities will fall is
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interest rate risk
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which of the following issues municipal bondss
corporations state federal government |
states (or cities)
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checkable accounts offered by credit unions are
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share-draft accounts
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which of the following is a short term financial instrument
us treasury bill ibm stock nyc bond residential mortgage |
US treasury bill
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as the transaction costs of selling an asset rise the asset is said to become
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less liquid
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if interest rate rise current price of a bond should
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fall
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monetary policy is determined by the
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federal open market committee
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most open market operations are
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defensive
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