Exam 20: The Money Supply and Banking Systems

Which of the following is an example of an asset-backed security?

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

________ are not-for-profit,member-owned cooperatives that offer deposit accounts and lending services to consumers and small businesses.

An adjustable rate mortgage entices borrowers with "teaser" rates that lower their payments in the early years but make them vulnerable to ________ as the "real" rates kick in.

________ is a secondary mortgage quasi-independent corporation created in 1970.

Credit derivatives based on home mortgages are known as mortgage-backed securities.

What are foreclosures? When do such situations occur?

Banks that provide financial services to consumers are called ________.

You have purchased your first home for $100,000,and the mortgage lender tells you that you will need a down payment of $15,000 because it will only lend you 85% of the purchase price.This percentage is known as the ________.

If the Fed decreases the reserve requirement,banks will have less money to lend.

Which of the following is an example of an open market operation?

Investment banks provide services to the general public.

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

Compare and contrast independent mortgage companies and mortgage brokers.

________ offer financial services to businesses,particularly in the area of international finance.

________ rate is the rate a bank charges its best loan customers.

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

Savings and loan associations are not-for-profit,member-owned cooperatives that focus on offering home mortgage loans.

Which of the following statements is TRUE of the Dodd-Frank Act legislation passed in 2010?

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