94. Unlike a hedge fund, a mutual fund:
a. is subject to very little government regulation and oversight.
b. can trade in derivative instruments.
c. caters to small individual savers.
d. All of the above.
e. None of the above.
98. Among the sources of AIGs problems were:
a. its heavy involvement in credit default swaps.
b. its heavy involvement in lending securities.
c. the downgrading of their credit rating.
d. All of the above.
e. Only A and B of the above.
99. Which of the following is true?
a. The required reserve ratio is the sum of the excess reserve ratio and the current ratio.
b. The required reserve ratio is the product of the excess reserve ratio and the current ratio.
c. The desired excess reserve ratio must be less than 15%.
d. The currency ratio must be less than 100%.
e. If people decide to hold less cash, then reserves in the banking sector will rise.
100. The money supply will fall if the:
a. required reserve ratio rises.
b. desired excess reserve ratio rises.
c. currency ratio rises.
d. All of the above.
e. Only A and B of the above.
106. In the model of money creation, if bank reserves rise by $1,000 then it must be true that currency held by the public:
a. also rises by $1000.
b. rises by more than $1000.
c. rises, but by less than $1000.
d. does not change.
e. falls by $1000.
107. The model of money creation presumes that when a bank holds positive undesired excess reserves that it will:
a. lend them out to the public.
b. use them to buy U.S. Treasury bills.
c. use them to increase their equity.
d. hold onto them for precautionary reasons.
e. return them to the Federal Reserve for an equal amount of gold.
94. Unlike a hedge fund, a mutual fund:
a. is subject to very little government regulation and oversight.
b. can trade in derivative instruments.
c. caters to small individual savers.
d. All of the above.
e. None of the above.
98. Among the sources of AIGs problems were:
a. its heavy involvement in credit default swaps.
b. its heavy involvement in lending securities.
c. the downgrading of their credit rating.
d. All of the above.
e. Only A and B of the above.
99. Which of the following is true?
a. The required reserve ratio is the sum of the excess reserve ratio and the current ratio.
b. The required reserve ratio is the product of the excess reserve ratio and the current ratio.
c. The desired excess reserve ratio must be less than 15%.
d. The currency ratio must be less than 100%.
e. If people decide to hold less cash, then reserves in the banking sector will rise.
100. The money supply will fall if the:
a. required reserve ratio rises.
b. desired excess reserve ratio rises.
c. currency ratio rises.
d. All of the above.
e. Only A and B of the above.
106. In the model of money creation, if bank reserves rise by $1,000 then it must be true that currency held by the public:
a. also rises by $1000.
b. rises by more than $1000.
c. rises, but by less than $1000.
d. does not change.
e. falls by $1000.
107. The model of money creation presumes that when a bank holds positive undesired excess reserves that it will:
a. lend them out to the public.
b. use them to buy U.S. Treasury bills.
c. use them to increase their equity.
d. hold onto them for precautionary reasons.
e. return them to the Federal Reserve for an equal amount of gold.
