Exam 20: The Money Supply and Banking Systems

DBS bank has formed a special department to attract investments from wealthy individuals.The new department aims to obtain accounts that maintain a minimum balance of $20,000 or more.It also aims to offer premium credit cards and asset management services to such individuals.This is an example of ________.

Experian,TransUnion,and Equifax are the three major consumer ________ in the United States.

The Dodd-Frank Act aims to reform the banking industry.

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

The Fed decides to lower the discount rate offered to banks in the United States.This would ________.

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)________.

What is a bubble?

The ________ is the federal agency responsible for protecting money in customer accounts and managing the transition of assets whenever a bank fails.

The discount rate is the interest rate that member banks charge each other to borrow money overnight from the funds they keep in the Federal Reserve accounts.

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

The ________ concept played a huge role in risky and/or fraudulent subprime mortgage loans because lenders could make such loans and then use credit default swaps to avoid the consequences by passing the risk on to another party or institution.

________ is the government-sponsored enterprise responsible for guaranteeing and funding home mortgages.

Identify and discuss the three categories of investment banks.

Independent mortgage companies are non-bank companies that ________.

A mortgage loan that has a variable interest rate over the life of the loan is known as a(n)________ mortgage.

Credit freeze is a situation in which the federal government bans the issue of new loans.

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

The recession in 2007 was caused due to ________.

Labex Chemicals has invented a new vaccine for pneumonia in children.The vaccine is hyped to bring in huge profits for the firm.Because of this hype,the market value of Labex's shares increase by 300 percent.Many experts believe that this appreciation is much more than the likely benefits that the shareholders will receive.This situation exemplifies a(n)________.

As a part of the Fed's function of designing and implementing monetary policy,the ________ decides on monetary policy.