Exam 10: Credit Markets

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.Now Amateur Bank gets a 25 percent return on its investment with GoPro,and Robbie pays back her loan plus 20 percent interest.Amateur Bank uses these returns to pay off part of its loan from Pro Bank.Also,Jackie defaults on her loan.What is the current value of Amateur Bank's stockholders' equity?

The following figure shows credit demand and credit supply curves. -Refer to the figure above.Which of the statements below could explain a shift of equilibrium in the credit market from point C to point D?

The market where borrowers obtain funds from savers is referred to as the ________.

The following table lists some statistics on Boring Bank. -Refer to the table above.If Boring Bank faces a required reserve ratio of 10 percent and has twice as many excess reserves as required reserves,how many total assets does Boring Bank have?

Everything else remaining unchanged,what is likely to happen to the credit demand curve of a software producing firm if: a)there is an increase in the real interest rate? b)it plans to expand production in near future?

The loanable funds market is also referred to as the ________.

If the nominal interest rate in an economy is 6 percent and the rate of inflation in the economy is 4 percent,the real interest rate in the economy is ________.

The following table lists some statistics on Boring Bank. -Refer to the table above.Boring Bank has total liabilities of $320.Using the information in the table,what is the value of Boring Bank's long-term debt?

If the total assets of a bank equal $50,000 and the total liabilities of the bank equal $20,000,stockholders' equity will equal ________.

Which of the following statements is true?

The following table lists some economic agents and their intentions. At present the interest rate is 5 percent. -Refer to the table above.You learn that currently the nominal interest rate lies below the real interest rate.From this you can infer that ________.

If Safeco Bank is shut down by the government and taken over by another bank,what happens to deposits and to the stockholders' equity?

Which of the following is a role of the Federal Deposit Insurance Corporation of the United States?

The annual price of a $1 loan is referred to as ________.

Assuming all else equal,an increase in the real interest rate will cause ________.

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 does Free Donut Bank's stockholders' equity change if the bank's long-term debt decreases by $50 and its long-term investments increase by $50?

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 assets?

Which of the following is NOT an asset of a bank?

What was one of the reasons for creating the FDIC regulatory system in 1933?

Scenario: Alpha Bank has $100,000 in total assets and $45,000 in total liabilities. Beta Bank has $250,000 in total assets and $220,000 in total liabilities. -Refer to the scenario above.What is Beta Bank's Stockholders' equity?