Fill in the blanks to complete the passage about discount loans. Discount loans extended by the Federal Reserve Bank normally an important factor in the macroeconomy. However, in crises discount loans are a safety net that reassures the the economy's best interest that the Fed serves as a regulator of banks because of the of banking. It is in nature are independent" public interdependent are not financial market

Fill in the blanks to complete the passage about discount loans. Discount loans extended by the Federal Reserve Bank normally an important factor in the macroeconomy. However, in crises discount loans are a safety net that reassures the the economy's best interest that the Fed serves as a regulator of banks because of the of banking. It is in nature are independent" public interdependent are not financial market

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Monetary System

Section: Chapter Questions

Problem 6PA

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8
Which of these statements are true? The discount rate is normally equal to the federal funds rate. The federal funds ratre is normall higher than the discount rate. The Federal Funds rate is the rate that banks are charged when they borrow from the Fed. O The discount rate is normally higher than the federal funds rate.
Nobel Prize winner Franco Modigliani found that themost important transmission mechanisms of monetarypolicy involve consumer expenditure. Describe how atleast two of these mechanisms work
Below is the balance sheet for a bank. Under "Other" it has listed "$X" just think of this as the dollar amount needed to make the balance sheet balance. It is not important what that value is for this question. AssetsLiabilitiesReserves 32Deposits 205Loans 150 Securities 53Other $X Using the balance sheet above, find the level of required reserves for this bank if the required reserve ratio = 8%(Give answers to 2 decimal places as needed)
6
Below is the balance sheet for a bank. Under "Other" it has listed "$X" just think of this as the dollar amount needed to make the balance sheet balance. It is not important what that value is for this question. AssetsLiabilitiesReserves 44Deposits 255Loans 155 Securities 51Other $X Using the balance sheet above, find the level of excess reserves this bank is holding if the required reserve ratio = 6%(Give answers to 2 decimal places as needed)
When regulators engage in macroprudential regulation, they focus on O the safety and soundness of the entire financial institution. O the credit standards of all loans held by the financial institution. O the safety and soundness of the financial system in aggregate. O the safety and soundness of cach liability of the financial institution. A
Recognize thehistorical context ofthe development ofthe central bankingsystem
Deposit Insurance, as mentioned in the LIVE lecture (Week 3), is one way a Governmencould help with 'what type of risk faced by Banks? Choose the most direct one.
QUESTION 12 The fed funds rate and the discount rate are interest rates banks charge households to borrow money overnight. O True O False QUESTION 13 What happened to the discount rate in January 2003 and why? Read this article from the Federal Reserve to find the answer. The discount rate moved below the fed funds rate because fewer banks wanted to borrow from the Fed anymore The discouunt rate became equal to the fed funds rate because the bank lending programs were merged into one The discount rate moved above the fed funds rate so any sound financial institution could borrow from the Fed and to eliminate the perception banks were being subsidized O All of the above None of the above QUESTION 14 What is the most important change in the fed funds rate since the Financial Crisis began in 2007? O it is much lower and has been essentially zero percent (0%) most of the time O It has become much more variable (ups and downs) O It no longer increases shortly before a recession (gray shaded…
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Please describe a shadow bank/define shadow banking and explain why thesefinancial institutions pose a problem to customers and/or the financial systemas a whole