Exam 10: Credit Markets

The investments that a bank makes are known as ________.

John makes it a point to save a portion of his salary every month.Assuming all else equal,if the real interest rate increases,it is likely to cause ________.

The following table shows the balance sheet for Poor Baby Bank. -Refer to the table above.What is the value of total assets for Poor Baby Bank?

Economic agents who borrow funds are known as ________.

The transfer of short-term liabilities into long-term investments is called ________.

The following table lists some economic agents and their intentions. At present the interest rate is 5 percent. -Refer to the table above.Assume that Peter,who needs a loan of $10,000 to repair his business,enters the loanable funds market.Inflation is 3 percent.Which answer below could describe the new equilibrium?

Which of the following is likely to shift the credit demand curve of a computer manufacturer to the left,assuming all else equal?

List the various categories into which a bank's assets are divided.

List four reasons people save.

Normally,the Federal Deposit Insurance Corporation would shut down a bank when the ________.

Which of these financial intermediaries is most likely to invest in new companies that are just starting up and have no track record?

Scenario: Amateur Bank is just starting out and has had the following transactions: • Amateur Bank takes out a $3,000 loan from Pro Bank. • Amateur bank has $2,500 invested in building and operations. • Suzie deposits $1,200. • Joe deposits $750. • Robbie takes out a loan for $900. • Jackie takes out a business loan for $625. • Amateur Bank invests $1,000 in GoPro. -Refer to the scenario above.How much does Amateur Bank have in total liabilities?

The statement of the assets and liabilities of an entity is referred to as ________.

The credit demand curve is ________.

The following figure shows credit demand and credit supply curves. -Refer to the figure above.Assume that at point A the real interest rate is 8 percent,the inflation rate is 3 percent,and the total quantity of credit in the market at equilibrium (Q*)is equal to $100 million.Which of the following could be true about point B?

The following table shows the balance sheet for Poor Baby Bank. -Refer to the table above.If the required reserve ratio is 20 percent,then how much in excess reserves does Poor Baby Bank have?

Everything else remaining unchanged,what is likely to happen to the credit supply curve of households if: a)there is a decrease in the real interest rate? b)households expect a recession in near future?

All else being equal,an increase in government borrowing is likely to cause a(n)________.

The following table shows Free Donut Bank's balance sheet. Free Donut Bank has a required reserve ratio of 20 percent and has $75 in excess reserves. -Refer to the table above.How do Free Donut Bank's total liabilities change if the bank's cash equivalents increase by $100?

What does the slope of the credit supply curve imply? When do movements along a credit supply curve occur?