The creation of an asset bubble is a concern when the Federal Reserve:Select one:O a. grows the supply of money too slowO b. keeps interest rates artificially low for too longO c. raises interest rates too highO d. increases regulation that reduces bank lending

(a). Grows the supply of money too slowIncorrectSlow growth in the money supply can lead to…

Answered: The creation of an asset bubble is a…

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 10PA

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Coursc asibdala Table 1 First Charter Bank Assets Liabilities $800 $400 $1.200 Reserves Loans Total Deposits Net Worth Total Refer to Table 1. The required reserve ratio is 25%. If the First Charter Bank is meeting its reserve requirement and has no excess reserves, its reserves equal Lütfen birini seçin: O A. $300 O B. $600 O C. SO O D. $100 O E. $200 The Italian economy can be characterized by Equation 24.1.
Which entity acts to protect depositors from a bank run by insuring all deposits up to $250,000? O A. the Federal Reserve B. the Department of Justice O C. the FDIC D. the Office of Management and Budget Reset Selection
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Table 1 First Charter Bank Assets Liabilities Reserves $800 $400 Deposits Net Worth Loans Total $1.200 Total Refer to Table 1. The required reserve ratio is 25%. If the First Charter Bank is meeting its reserve requirement and has no excess reserves, its loans equal Lütfen birini seçin: O A. $600 O B. $900 OC $1,000 O D. $1,800 O E $1400
Which of the folloving represents a change in today's banking policies that should prevent a recurrence of the bank panics of 1930-1933? O A. banks are more cautious lenders O B. banks keep large amounts of excess reserves on hand O . the FDIC insures bank deposits and therefore depositors do not panic and rush to withdraw money when individual banks have financial problems O D. the President now has the authority to close banks whenever panics occur
The persons who are laid off when a supermarket closes because the manager did not run the business efficiently are considered to be Select one: O a. frictionally unemployed. b. seasonally unemployed. structurally unemployed. O C. d. cyclically unemployed. marginally unemployed.
Table 29-5. Reserves Loans Assets Bank of Pleasantville O $1,000 O $400 O $200 O $250 $2,000 18,000 Liabilities Deposits $20,000 Refer to Table 29-5. If the Fed's reserve requirement (R) is 9 percent, then what quantity of excess reserves does the Bank of Pleasantville now hold?
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11. People view cell phone and its charger as complements to one another. If the price of cell phone increases, economists would expect: O The demand for charger will not change. O The demand for charger to increase. O The quantity of cell phone demanded to increase O The demand for charger to decrease. 12. Which one is not the role of the Fed? O The Fed also acts as a bank to the American citizens with net wealth is larger than 10 million dollar. O The Fed also acts as a bank to other banks by clearing checks, making electronic payments, and providing the currency that American's need and use every day. O The Fed also helps to supervise and regulate the nation's banks and works to promote a stable financial system for consumers, communities, and businesses The Fed implements monetary policies that promote maximum employment and m stable prices.
QUESTION 6 The United States was among the first of the modern industrial nations to establish a central banking system. O True O False QUESTION 7 The federal funds rate is the short-term interest rate that banks charge one another for loans. True False QUESTION 8 The president has influence on Federal Reserve policy because Oa. he can fire the chair. Ob. he can replace board members at any time. Oc. he can veto any Fed policy Od. he appoints the board members and the chair.
Why would a bank prefer making loans by borrowing funds in the fed funds market? Select one: O A. The fed funds rate is less than the interest rate on reserve balances OB. The fed funds market is less regulated than bank reserves O C. Banks need to maintain reserves above the Fed's required reserve ratio O D. Each of these answers is correct Which of the following is (1) calculated with information provided by the Bureau of Economic Analysis, (2) tracks domestic spending on durable goods, non-durable goods, and services, and (3) factors in recent price changes before comparing to an index base? O a. The Consumer Price Index (CPI) O b. The Producer Price Index (PPI) O c. The Personal Consumption Expenditures Price Index (PCEPI) O d. The International Standards Price Index (ISPI)

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The creation of an asset bubble is a concern when the Federal Reserve: Select one: O a. grows the supply of money too slow O b. keeps interest rates artificially low for too long O c. raises interest rates too high O d. increases regulation that reduces bank lending