Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
16 Cards in this Set
- Front
- Back
|
Required reserves are currently at _____.
|
10%
|
|
|
Results from a bank having more liabilities than assets:
|
Insolvent
|
|
|
What are the 4 ways banks can acquire reserves?
|
1) Borrow $ on the Federal Fund market
2) Sell securities 3) Borrow $ from the Federal Reserve 4) Call in loans |
|
|
The interest rate that the Federal Reserve charges:
|
Discount rate
|
|
|
What does ROA tell us?
|
How well the company is doing.
|
|
|
How do banks overcome adverse selection and moral hazard (3)?
|
1) Screening
2) Specialization & lending 3) Monitoring & enforcing restrictive covenants |
|
|
How many Federal Reserve banks does the U.S. have?
|
12
|
|
|
Who is ALWAYS on the Open Market Committee?
|
President of the New York Federal Reserve Bank
|
|
|
What is the overall purpose of the FED?
|
Control the money supply
|
|
|
What does ROE tell us?
|
How well the stockholders are doing.
|
|
|
What are the 3 functions of the Federal Open Market Committee?
|
1) set reserve requirements
2) set the discount rate 3) engage in open market operations |
|
|
What are the FED's assets? Liabilities?
|
ASSETS:
Govt. securities Discount loans LIABILITIES: Currency in circulation Reserves |
|
|
When the FED _____, you can expect inflation to follow.
|
Lowers the discount rate
|
|
|
For every $1 increase in the monetary base, the money supply will increase by _____.
|
$2.5-
|
|
|
The government borrow money from _____ to cover its deficit.
|
U.S. Treasury Bonds
|
|
|
The FDIC works in what 2 ways to handle bank failures?
|
1) Pay-off method
2) Purchase & assumption |
