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1. Requiring banks to hold a certain level of cash reserves, insuring deposits, and lending to banks that are illiquid are all ways that: A) commercial banks take responsibility for reducing the risks inherent in banking. B) the Federal Reserve reduces the risks. inherent in banking. C) the private market reduces the risks inherent fn banking. D) the federal government reduces the risks inherent in banking.

1. Requiring banks to hold a certain level of cash reserves, insuring deposits, and lending to banks that are illiquid are all ways that: A) commercial banks take responsibility for reducing the risks inherent in banking. B) the Federal Reserve reduces the risks. inherent in banking. C) the private market reduces the risks inherent fn banking. D) the federal government reduces the risks inherent in banking.

Essentials of Economics (MindTap Course List)
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 4PA
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* My Courses This Course Student Services HFC Online Video Tutoria 1. Requiring banks to hold a certain level of cash reserves, insuring deposits, and lending to banks that are illiquid are all ways that: A) commercial banks take responsibility for reducing the risks inherent in banking. B) the Federal Reserve reduces the risks. inherent in banking. C) the private market reduces the risks inherent in banking. D) the federal government reduces the risks inherent in banking. 2. Non-bank institutions that act a lot like banks but are not regulated like banks, such as hedge funds, are collectively known as: A) thrift institutions. B) the Federal Reserve System. C) the shadow banking system. D) investment banks. 3. Managing market risk requires reducing the potential impact of on a bank's profits. A) declining levels of bank reserves B) rising interest rates C) loans that don't get repaid D) having to sell assets quickly 4. Which of the following is NOT an example of a depository institution? A) A thrift institution B) An investment bank C) A commercial bank D) A credit union 5. In the originate-to-distribute model of banking, which of the following 1s NOT a way that banks tend to make profit on loans? A) By charging fees for closing the loans B) By charging a higher interest rate on loans than it pays deposttors C) By charging fees to other institutions for continuing to service a loan once 1t's sold D) By pooling loans together and selling shares of that pool
Transcribed Image Text:* My Courses This Course Student Services HFC Online Video Tutoria 1. Requiring banks to hold a certain level of cash reserves, insuring deposits, and lending to banks that are illiquid are all ways that: A) commercial banks take responsibility for reducing the risks inherent in banking. B) the Federal Reserve reduces the risks. inherent in banking. C) the private market reduces the risks inherent in banking. D) the federal government reduces the risks inherent in banking. 2. Non-bank institutions that act a lot like banks but are not regulated like banks, such as hedge funds, are collectively known as: A) thrift institutions. B) the Federal Reserve System. C) the shadow banking system. D) investment banks. 3. Managing market risk requires reducing the potential impact of on a bank's profits. A) declining levels of bank reserves B) rising interest rates C) loans that don't get repaid D) having to sell assets quickly 4. Which of the following is NOT an example of a depository institution? A) A thrift institution B) An investment bank C) A commercial bank D) A credit union 5. In the originate-to-distribute model of banking, which of the following 1s NOT a way that banks tend to make profit on loans? A) By charging fees for closing the loans B) By charging a higher interest rate on loans than it pays deposttors C) By charging fees to other institutions for continuing to service a loan once 1t's sold D) By pooling loans together and selling shares of that pool
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