Exam 4: Financial Intermediaries and the Banking System

Suppose the reserve requirement for transaction deposits is 10% and it is 5% for nontransaction deposits.What is the total reserve requirement for a bank with total deposits equal to $800 million, if $600 million of these deposits are classified as transaction deposits?

An increase in depository institutions' reserves will cause

Historically, credit unions were

Until the passage of the International Bank Act of 1978, foreign banks enjoyed substantial operating advantages over domestic banks.

Federal deposit insurance has prevented the failure of depository institutions.

All but which of the following financial institutions would you expect to be able to get federal deposit insurance for their customers?

Life insurance protects

The Federal Reserve System established

Banks are regulated because they provide several important services to their local and national economies.

The Federal Reserve System controls the money supply and is not a bank regulator.

Demand deposits represent the largest asset category for commercial banks.

Which of the following is not a benefit associated with financial intermediaries?

Which of the following is not a major provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010?

Which of the following financial institutions is most likely to be the cheapest source of funds for individual borrowers?

A fractional reserve banking system might be in trouble if

A small state bank currently has reserves equal to $300,000.If the state reserve requirement is 20%, but the bank currently maintains a 30% reserve, how much are the excess reserves the bank currently has?

Individuals have greater expertise than financial intermediaries when it comes to gathering, verifying, and evaluating information concerning borrowers.

Social Security is a fully funded insurance program.

Savings and loan associations were established to provide commercial real estate financing.

All else equal, the nation's money supply increases when the Federal Reserve purchases U.S.Treasury securities.