Econ: Money, Banking, & Finance

ECON 2035Spring 2012 Review Questions for examination 3 (chapters: of import Banks & the federal Reserve System, the Money put out Process, and only part of Tools of monetary Policyjust the customary Monetary Policy Tools section) run 3: WEDNESDAY APRIL 25 30 quaternary choice questions 1. What is a underlying bank? A government activity activity institution that serves as a bankers bank & is trusty for conducing monetary form _or_ frame of government & promoting stability in the financial system 2. In 1900 there were about 18 cardinal banks in the world, solely today there be about 160 important banks in the world. Why be there more central banks today than in 1900? (two reasons) much(prenominal) countries Recognition that monetary policy is better conducted by important Bank that is a clear up institution with in the governing body (NOT part of the Treasury Department) 3. Is the sway The functions of central banks call for remained unvarying over time. square(a) or false? Thoroughly abbreviate why you indicated the line was true or false. If you think the statement is true, you should explain the timeless functions. If you issue the statement is false, you should explain the functions in the yesteryear and the functions now.

False = functions have evolved over time o past times ( Earliest primal Banks were constituted to facilitate brass finance its activities o Present ( today functions argon different; near Central Banks are forbidden by law from directly financial support government activities through loans to the government or by buy government debt directly from the government 4. recognize between microprudential and macroprudential regulation of the banking system. Microprudential social club = Pre-Subprime Crisis o Focus: on INDIVIDUAL financial institutions o design: to limit luxuriant risk taking by that institution Macroprudential Regulation = Post Crisis o Focus: on system as a unhurt & the interconnections among financial...If you want to get a bountiful essay, order it on our website: Ordercustompaper.com

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