Exam 18: The Financial Crisis of 2007-2009

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The ability of banks to get insurance from ______ encourages banks to take on a little bit _ risk than they would in the absence of deposit insurance.

(Multiple Choice)

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Question 21

A bank has $200 million in assets and $230 million in liabilities.The bank's net worth is _ million and the bank is .

(Multiple Choice)

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Question 22

When the money supply increases at the same time that velocity is decreasing,total spending will

(Multiple Choice)

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Question 23

Bank B takes 15,000 mortgage loans,bundles them together,and then sells slices of the bundle.This is descriptive of

(Multiple Choice)

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Question 24

If M = $1,200 billion and V = 4,then total spending is _______billion.Then velocity falls to 2 and M rises to $2,000 billion,so that total spending is now _ billion,and GDP has ___________.

(Multiple Choice)

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Question 25

The Federal National Mortgage Association (FNMA),also known as Fannie Mae,was established in to ____ demand in the housing market.

(Multiple Choice)

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Question 26

During the early 2000s the Fed's federal funds rate targets led to a _ in mortgage interest rates.

(Multiple Choice)

4.9/5

(74)

Question 27

A bank initially has $190 million in assets and $150 million in liabilities.The banks net worth (capital)is _ million.If the bank's assets increase by 10% and its liabilities do not change,its capital increases by .

(Multiple Choice)

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(82)

Question 28

A bank is solvent as long as its liabilities are greater than its assets.

(True/False)

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Question 29

What does the term run on the bank mean?

(Multiple Choice)

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Question 30

Regulatory capital is the amount of capital financial institutions should hold based on the riskiness of their different assets.

(True/False)

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(73)

Question 31

The answer is,"They are mortgage loans granted to persons who might have low credit ratings." The question is:

(Multiple Choice)

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(67)

Question 32

With collateralized debt obligations (CDOs)buyers are purchasing _ slices,and buyers of mortgage-backed securities (MBSs)purchase ___ slices.

(Multiple Choice)

4.8/5

(72)

Question 33

The _______________________ (TARP)is an example of a government program created to help stabilize the financial sector during the financial crisis of 2007-2009.

(Multiple Choice)

4.8/5

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Question 34

Regulatory capital arbitrage is a means of

(Multiple Choice)

4.8/5

(77)

Question 35

A bank with a leverage ratio of 9 to 1 has

(Multiple Choice)

4.9/5

(90)

Question 36

As a bank approaches insolvency,it is likely to

(Multiple Choice)

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(77)

Question 37

In the 1990s and early 2000s,mortgage lending standards __ in the United States.In general,there was a move _ traditional lending practices during this period.

(Multiple Choice)

4.8/5

(80)

Question 38

The downside to a bank having a high leverage ratio is that a decline in asset value magnifies losses.

(True/False)

4.8/5

(81)

Question 39

Which of the following statements is false?

(Multiple Choice)

4.9/5

(75)

Question 40

Showing 21 - 40 of 71

Exam 18: The Financial Crisis of 2007-2009

The ability of banks to get insurance from ______________ encourages banks to take on a little bit _________ risk than they would in the absence of deposit insurance.

A bank has $200 million in assets and $230 million in liabilities.The bank's net worth is _____________ million and the bank is ____________.

When the money supply increases at the same time that velocity is decreasing,total spending will

Bank B takes 15,000 mortgage loans,bundles them together,and then sells slices of the bundle.This is descriptive of

If M = $1,200 billion and V = 4,then total spending is _______________billion.Then velocity falls to 2 and M rises to $2,000 billion,so that total spending is now _______________ billion,and GDP has _________________.

The Federal National Mortgage Association (FNMA),also known as Fannie Mae,was established in ________to ____________ demand in the housing market.

During the early 2000s the Fed's __________ federal funds rate targets led to a ___________ in mortgage interest rates.

A bank initially has $190 million in assets and $150 million in liabilities.The banks net worth (capital)is _____________ million.If the bank's assets increase by 10% and its liabilities do not change,its capital increases by ____________ .

A bank is solvent as long as its liabilities are greater than its assets.

What does the term run on the bank mean?

Regulatory capital is the amount of capital financial institutions should hold based on the riskiness of their different assets.

The answer is,"They are mortgage loans granted to persons who might have low credit ratings." The question is:

With collateralized debt obligations (CDOs)buyers are purchasing _________ slices,and buyers of mortgage-backed securities (MBSs)purchase ___________ slices.

The _______________________ (TARP)is an example of a government program created to help stabilize the financial sector during the financial crisis of 2007-2009.

Regulatory capital arbitrage is a means of

A bank with a leverage ratio of 9 to 1 has

As a bank approaches insolvency,it is likely to

In the 1990s and early 2000s,mortgage lending standards ______________ in the United States.In general,there was a move _____________ traditional lending practices during this period.

The downside to a bank having a high leverage ratio is that a decline in asset value magnifies losses.

Which of the following statements is false?

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free, controlled, and Relative

Supply,demand,and Price: Applications

Macroeconomic Measurements, part I: Prices and Unemployment

Macroeconomic Measurements, part II: GDP and Real GDP

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self-Regulating Economy

Keynesian Macroeconomics and Economic Instability: a Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money,banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, technology, ideas, and Institutions

Debates in Macroeconomics Over the Role and Effects of Government

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

Globalization and International Impacts on the Economy

The Economic Case for and Against Government: Five Topics Considered

Stocks, bonds, futures, and Options

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The ability of banks to get insurance from ______ encourages banks to take on a little bit _ risk than they would in the absence of deposit insurance.

A bank has $200 million in assets and $230 million in liabilities.The bank's net worth is _ million and the bank is .

If M = $1,200 billion and V = 4,then total spending is _______billion.Then velocity falls to 2 and M rises to $2,000 billion,so that total spending is now _ billion,and GDP has ___________.

The Federal National Mortgage Association (FNMA),also known as Fannie Mae,was established in to ____ demand in the housing market.

During the early 2000s the Fed's federal funds rate targets led to a _ in mortgage interest rates.

A bank initially has $190 million in assets and $150 million in liabilities.The banks net worth (capital)is _ million.If the bank's assets increase by 10% and its liabilities do not change,its capital increases by .

With collateralized debt obligations (CDOs)buyers are purchasing _ slices,and buyers of mortgage-backed securities (MBSs)purchase ___ slices.

In the 1990s and early 2000s,mortgage lending standards __ in the United States.In general,there was a move _ traditional lending practices during this period.