Worksheet 7 - Introduction to Macroeconomics Econ...

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Introduction to Macroeconomics Econ 104a,c,d,e,f, - Spring 2010 Worksheet 7 – Deregulation, Current Monetary Policy, Aggregate Demand and Aggregate Supply 1. What were ways the Great Depression and bank failures changed the way we treated banks in the 1930’s? (What was the reason for bank regulation?) The reason for bank regulation was that it needed to be done after the Great Depression to avoid future bank failures. When the Glass-Steagall Act of 1933 was passed, regulation was found to be important because this act helped protect the public from investors who denied funds to equally worthy activities. Regulation was also found to be important with Q and interest rates that could be charged. 2. What were some of the ways banks were deregulated starting in the 1980’s? 1980 Depository Institutions Deregulation and Monetary Control Act (DIDMCA) set lower reserve requirements for non-member banks, and eliminated regulation Q 1982 Garn-St. Germain Depository Institutions Act, all financial institutions can offer interest bearing checking, and regulators can promote mergers for failing banks, and expanded lending and deposit powers of S&L’s (including permitting loans for commercial real estate) 1987 Competitive Equality Banking Act (CEBA) 1994 Congress set nationwide standards for banks beyond home state
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This note was uploaded on 10/19/2011 for the course ECON 104 taught by Professor Dolenc during the Spring '08 term at UMass (Amherst).

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Worksheet 7 - Introduction to Macroeconomics Econ...

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