HW 6 - MC Questions

HW 6 - MC Questions - Homework 6 MC questions MULTIPLE...

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Homework 6 MC questions MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) A major controversy involving the banking industry in its early years was 1) _______ A) whether banks should both accept deposits and make loans or whether these functions should be separated into different institutions. B) whether banks should be allowed to issue their own bank notes. C) what percent of deposits banks should hold as fractional reserves. D) whether the federal government or the states should charter banks. 2) Probably the most significant factor explaining the drastic drop in the number of bank failures since the Great Depression has been 2) _______ A) rapid economic growth since 1941. B) better bank management. C) the creation of the FDIC. D) the employment of new procedures by the Federal Reserve. 3) The most significant change in the economic environment that changed the demand for financial products since 1970 has been 3) _______ A) the aging of the baby - boomer generation. B) the dramatic increase in competition from foreign banks. C) the dramatic increase in the volatility of interest rates. D) the deregulation of financial institutions. 4) Both ________ and ________ were financial innovations that occurred because of interest rate risk volatility. 4) _______ A) adjustable - rate mortgages; commercial paper B) adjustable - rate mortgages; financial derivatives C) sweep accounts; commercial paper D) sweep accounts; financial derivatives 5) A firm issuing credit cards earns income from 5) _______ A) loans it makes to credit card holders.
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HW 6 - MC Questions - Homework 6 MC questions MULTIPLE...

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