hw7f06 - deposit interest rates on both loan interest rates...

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Print name______________________ Sign name ___________________________ Econ 520 F06 Homework 7 11/9, 11/14, 11/16, due 11/17 7.1 (18 homework points) Connect each event on the left with the wartime episode on the right that it best characterizes. Event Episode First wartime Use of Open Market Operations Civil War Heavy use of Discount Window World War I National Banking Act passed World War II Two sharp deflations after war Vietnam War Continuing inflation after war Relatively stable prices after war 7.2 (15 homework points) X Enterprises has $10 billion in assets, $7.5 billion in debt liabilities, and $2.5 billion in shareholder equity or net worth. a) What is the Leverage Ratio of X Enterprises? b) A separate holding company, X Holdings, buys a 50% controlling interest in X Enterprises stock, and itself has a leverage ratio of 3:1. How many dollars of X Enterprises assets are controlled by $1 of equity in X Holdings?
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2 7.3 (15 homework points) Using the Loanable Funds Model, show the effect of a ceiling on
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Unformatted text preview: deposit interest rates on both loan interest rates and the total quantity of credit, when all credit is intermediated, the supply of credit by depositors is a function of the deposit interest rate, and the demand for credit by borrowers is a function of the loan interest rate. Use back of page if necessary. 7.4 (18 HW points) Connect each legislation in the left column with one of its effects in the right column Glass-Steagall Act of 1933 Strengthened capital standards for federally insured banks & thrifts Riegle-Neal Act of 1994 Authorized “Net Worth Certificates” to keep insolvent thrifts in business. FIRREA Act of 1989 Eliminated deposit interest ceilings on savings accts. FDICIA Act of 1991 Permitted interstate branching DIDMCA Act of 1980 Separated Commercial and Investment Banking – repealed 1999 Garn-St Germain Act of 1982 Bailed out FSLIC-insured depositors at taxpayer expense...
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hw7f06 - deposit interest rates on both loan interest rates...

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