Exam 20: The Money Supply and Banking Systems

Dodd-Frank Act created the Financial Stability Oversight Council to monitor for systemic risks.

Loather Bank is a commercial bank in Italy.The bank offers financial services to individuals in Italy.The major products of the bank include personal loans,savings accounts,credit cards,and debit cards.Loather Bank is a(n)________.

________ is a process in which debts,such as mortgages,are pooled together and transformed into investments.

Which of the following federal actions is aimed at increasing the money supply in markets?

The recession is 2007 was caused due to ________.

Loan-to-value (LTV)is commonly defined as the amount of a loan relative to a house's assessed value.

Both Fannie Mae and Freddie Mac are agencies of the FDIC.

Compare and contrast thrift banks and credit unions.

EBL is a financial institution headquartered in Rochester,New York.Membership in EBL is open to residents of Rochester and is financed by the members themselves.EBL accepts deposits from its members and provides loans to its members.EBL provides a low-cost finance option to the residents of Rochester.EBL is a ________.

Money serves as a ________ when it is used to measure the value of goods and services.

Jackson Group,Inc.is an American multinational banking firm.It offers such services as stock market brokerage,underwriting,and initial public offering.Jackson Group is an example of a(n)________.

If the Fed sells Treasuries in open-market operations,the country's money supply increases.

________ helped fuel the housing bubble by expanding the secondary market for subprime loans.

Many borrowers have suffered financially as a result of adjustable rate mortgages and option ARM's.Some borrowers purchased homes based on low introductory rates and then suffered payment shock when interest rates increased and so did their monthly payments.Option ARM's allowed borrowers to make payments that did not even cover accruing interest on the mortgage,resulting in negative amortization in some cases.Should the federal government regulate adjustable rate mortgages and option ARM's? Why or why not? Support your reasoning.

The term bubble is used to describe a market situation in which low demand for an asset reduces its price far below its true economic value.

________ are non-bank companies that use their own funds to offer mortgages.

________ refers to sums of money,equal to a certain percentage of their deposits,that banks are legally required to keep on hand.

If you have reliable income,sufficient assets and a good credit history,you would likely qualify for a prime mortgage.

When the Federal Reserve buys or sells U.S.Treasury bonds,bills and notes,it is influencing the money supply through ________.

________ is a market situation in which frenzied demand for an asset pushes the price of that asset far beyond its true economic value.