quiz - — 0:35:53 Page 1 2 3 4 5 e 7(Next 1 What are the...

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Unformatted text preview: — 0:35:53 Page: 1 2 3 4 5 e 7 (Next) 1 What are the pros and eons 0t deposit insurance? Marks 1 Choose one answer a pro: creates less banking crises, con' banking customers worry more about their deposits. b pro: limits banking panirs, con: creates moral hazard. 7 [2. pro: minimizes morai hazard. con: creates more banking crises. (g) d. pro: minimizes moral hazard: con, creates more banking panics 2 The Fed prints $100 to buy Treasury securities from the banking system Assume the requirement is 20%. Assume the full money multiplication pmcess is at work. How much money is created by the banking Marks: 1 system? Choose one answer a $500 b. 5100 ('1 1:. $400 _ d. zero. Fed creates the money 3 Consider a failing bank and assume the FDiC insurance is $250,000. A deposit of$550.000 is worth how much if the FDIC usesthe payofi method'? The purchase and assumption method? Marks: 1 Choose one answer. (Q; 3. 495.000; 550000 b. 555.000; 550000 r: 25,000; 550,000 (:3 :1 500000; 550000 4 Assume that the Federal Reserve prints $500 in currency and uses the eurrency to buy Treasury securities from the banking system The banking system then loans out $900 of dtecking money What is the Marks: 1 new money suppiy, M1? Choose one answer. ('3 a. 1400 b. 900 .3 t: 500 .3 d. 400 5 Use Table 7. Calculate the total risk adjusted assets Marks. 1 Table 7 Assets Liabilities Reserves 55m Checkable deposits S40m Treasury securities S3flm Non—transaction Deposits mm Real Estate loans 520m Commercial Loans $75m Choose one answer. Q a. $75M Q h. $100M (i) c. $95M Save without submitting Submit al and finish Page: 1 2 3 4 5 6 7 (Next) ‘r'nu srs ingged in as ohsn Shari (Lognul) SAN FRA S'm's UNIVE I'l \' ...
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