Exam 20: The Money Supply and Banking Systems

Charles buys a house and waits till its value rises.He then resells the house to make a big profit.This act of making profit by reselling is referred to as ________.

Banks that provide financial services to consumers are called ________.

Which of the following is a tool available to the Fed to manage the money supply?

Dodd-Frank Act is a legislation aimed at reforming the banking industry.

By altering margin requirements,the Fed is able to influence ________.

The Fed sets the federal funds rate by ________.

Discuss the different ways in which lowering mortgage interest rates can heat up the housing market.

The situation in which loans and other sources of funding become scarce is known as a(n)________.

________ refers to a severe shortage of cash during which companies can't get enough cash to meet their operating needs.

The dot-com bubble occurred due to ________.

If the Fed buys Treasuries on the open market,the country's money supply increases.

Explain how changing reserves will affect the money supply.

If you purchase a house,do some repairs and then resell it for a significant profit,you are flipping the house.

Which of the following is a service that is typically offered by investment banks?

Compare and contrast independent mortgage companies and mortgage brokers.

________ is a payment situation in which the balance owed on a loan increases over time rather than decreases.

In the secondary mortgage market,________.

A borrower is foreclosing when he stops making payments on his mortgage.

Rhombus bank is a bank that focuses on home mortgages.The bank has 283 offices and has issued more than 0.1 million home loans to people with different income levels.The bank also accepts deposits to generate money for providing home loans.Rhombus bank is best referred to as a(n)________.

The Fed decides to increase the reserve requirements on the deposits of banks.This would ________.