Answered: As the MFI manager in one of the MFIs…

As the MFI manager in one of the MFIs explain the measures you will put in place to ensure you don’t suffer from the high default rates

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter13: The Federal Reserve System

Section13.1: The Structure And Functions Of The Federal Reserve System (the Fed)

Problem 3ST

See similar textbooks

Related questions

Q: Currently, can cryptocurrency perform the three functions of money. Explain briefly.

A: Cryptocurrencies are a new type of investment. This type of investment does not require a…

Q: The terms MO, M1, M2 classify money according to which of the following? Level of liquidity Reserve…

A: Money is the source/medium of exchange in the economy. Money is classified into four categories…

Q: Long term interests rates affects the demand for money more than short term interest rates.…

A: Demand for money is positively related with income and negatively related with short term interest…

Q: As a "lender of last resort" the Fed :protects the deposits of $100,000 or less in all commercial…

A: A lender of last resort is an institution, that offers loans to commercial banks or other depository…

Q: A reserve requirement of 10 percent means a bank must have at least $300 of reserves if its…

A: Reserve requirement is the minimum amount held in the form of liquid assets by the banks.

Q: If the U.S. economy is entering in a recession. What kind of directives may address using monetary…

A: Recession refers to the situation where there is lower economic activity in an economy.

Q: Why do bonds trade at prices different than par

A: Bond:- A bond is regarded as a definite-income asset because it pays bondholders a guaranteed return…

Q: Explain why the interest rate channel of the transmission of monetary policy works better if there…

A: The interest rate channel is a monetary policy process in which a central bank's policy induced…

Q: Find the value of money creation when the initial deposit are 20,000 and the legal reserve ratio is…

Q: what assets are involved in quantitative easing?

A: Quantitative facilitating (QE) is a type of whimsical monetary policy wherein a central bank buys…

Q: What is a key advantage of money over other financial assets such as stocks, bonds, precious metals,…

A: One of the primary advantages of money over other financial assets is its universal acceptability.…

Q: The term “moral hazard” describes increases in risky behavior resulting from efforts to make that…

A: Moral hazard: It refers to the event in which one party gets involved in the risky event which the…

Q: What are the impacts of Inflation in risk management?

A: Inflation refers to the situation of increasing general price level during the period of time. The…

Q: The inadequacy of money supply circulating or available in the financial system makes the trading of…

A: International trade agreements govern the exchange of goods and services between two or more…

Q: Find The value of legal reserve ratio when the value of money multiplier is 22

A: # The money multiplier is the inverse of the legal reserve ratio. 1/LRR = Money multiplier

Q: Describe who issues each of the following moneymarket instruments:a. Treasury billsb. Certificates…

A: Treasury bills are issues by government of India in three forms; for 91 day, 182 and 364 days.…

Q: One reason why cryptocurrency is not considered money by many is that it is not considered to be a…

A: A cryptocurrency is a digital or simulated currency protected by encryption, making counterfeiting…

Q: If you were on an island with 10 other people and there were no money, do you think that money would…

A: Money economies and barter economies are the two sorts of economies. Our modern economies are based…

Q: What is a credit default swap? Please explain it in your own words.

A: A credit default swap is a financial derivative that allows an investor to offset credit risk with…

Q: Briefly explain how banks can optimize their position through managing their use of derivatives?

A: The probability of loss due to a borrowers failure to make payments on any type of debt is called…

Q: Q2. Discuss the impact of COVID-19 on money and capital markets

A: Pandemic have led to greater health alarms, adjusting to the situation people started working from…

Q: As far we know, central bank supervise the member banks and if CB the finds that a bank has not been…

A: Central banks in every economy supervise the way the banks work. They control the money supply in…

Q: The treasury yield curve is usually (but not always) . flat. upward sloping. downward sloping.…

A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…

Q: If the U.S. government has easy (cheap) access to foreign savings, through what mechanism will…

A: The government spends money in the economy to boost the economy. It finances its spending through…

Q: How are the wealth effect and the household liquidityeffect similar? How are they different?

A: Wealth: It is comprehensively characterized as resources or assets, fewer liabilities (total…

Q: Find the value of money multiplier when the CRR or the cash reserve ratio is 90%

Q: During the financial crisis of 2007-2008, the FDIC increased deposit insurance coverage from $50,000…

A: Financial crisis refers to the situation when a financial sector of a country faces a downturn in…

Q: What will be the money multiplier when the legal reserve ratio is stated as = 76%

A: the legal reserve ratio is stated as = 76%

Q: Why should we undertake QE when we can just monetize the debt?

A: Monetary policy is implemented by the monetary authorities in order to control and regulate the…

Q: Which of the following is a money market security?

A: Money market securities are debt products with maturities of one year or less. Money market…

Q: Banks want to hold as little cash as possible because holding cash a. provides very little…

A: Banks will not be willing to hold cash because it do not earn any interest.

Q: Why can fiat money be successfully used as a currency despite the fact that it has no intrinsic…

A: The money of any type, when used or circulated as a means of trade, particularly rotating notes and…

Q: There are three transactions a bank can make to increase leverage. Explain each type of transaction…

A: Balance sheet can be balanced when ASSETS = LIABILITIES+ CAPITAL Balance sheet can be defined as…

Q: How could higher deposit insurance premiums forbanks with riskier assets benefit the economy?

A: Insurance premium is the money charged by the insurance company from the insured person or business…

Q: Despite the emerging trends on the use of cryptocurrency, economics research so far has provided…

A: Cryptocurrency is a digital mode for money. Cryptocurrency in itself has no physical coin or note…

Q: How are cryptocurrencies popular nowadays (such as bitcoins) different from the currencies we used…

A: A cryptocurrency is a digital or virtual currency that is encrypted to prevent fraud and…

Question

As the MFI manager in one of the MFIs explain the measures you will put in place to ensure you don’t suffer from the high default rates

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

What is quantitative easing
How are cryptocurrencies popular nowadays (such as bitcoins) different from the currencies we used issued by central banks? Discuss briefly.
What is a credit default swap? Please explain it in your own words.
Describe why some banks maintain a relationship with a correspondent bank.
identifying what variable is affected in the money market and providing a detailed explanation as to why and how it is affected. What is MD and what is MS
Why can fiat money be successfully used as a currency despite the fact that it has no intrinsic value backing it up?
An inverted yield curve predicts that short-term interest rates a. are expected to rise in the future. b. will rise and then fall in the future. c. will remain unchanged in the future. d. will fall in the future. e. None of the above
How do banks manage interest rate risk? (Select all that apply) 1. Banks can increase their borrowings to manage interest rate risk 2. Interest rate swaps can reduce interest rate risk exposure 3. Banks can reduce interest rate risk by making more floating rate loans 4. Banks can manage interest rate risk by keeping some funds as repurchase agreements
What are the impacts of Inflation in risk management?
If federal deposit insurance is provided to banks at no cost to them, who pays when an insured depository institution fails and its depositors are reimbursed for the full amount of their deposits?
Why did the Bank of England in 2021 set bank rates to be maintained at 0.1%?
suppose that you deposit 8000 in your bank and the required reserve ration is 15 percent the maximum loan your bank can make as a direct result of your deposit is