As a "lender of last resort" the Fed  :protects the deposits of $100,000 or less in all commercial banks in the country .bails out any depository institution it has decided should not be allowed to fail .bails out any corporation the government has decided should not fail .is obligated to bail out any depository institution in the country that is in financial difficulty

Q: Commercial banks create money through Group of answer choices facilitating borrowing from the…

A: Commercial banks accept the deposit of people and grants loans to people too.  Commercial banks have…

Q: 1 ****************   1) Consider the US Federal Reserve System and compare it with another central…

A: a) Two features of the Bank of Japan that are very similar to the US Federal Reserve System (Fed)…

Q: A system of deposit insurance attracts risk-taking entrepreneurs into the banking industry.…

A: Understanding the influence of various stakeholders on the financial behavior of store owners is a…

Q: Overnight loans issued by the Federal Reserve to commercial banks are known as   A. Negotiable…

A: The overnight loans issued by the Federal Reserve to commercial banks are known as Federal Funds.…

Q: Banks are classified into different categories for efficient regulation of the central monetary…

A: Banks are classified into different categories in order to meet different demands such as business…

Q: The discount rate is the rate at which: the Fed lends to the other depository institutions. the…

A: Discount rate is also known as bank rate.

Q: When the Federal Reserve was created, its most important role was intended to be a storage facility…

A: Federal reserve system often knows as "fed" is the central bank of the united states. It uses its…

Q: Banks hold reserves in order to:     cover their customers' withdrawal needs.     cover the…

A: Bank reserves: - Bank reserves are the fraction of total reserves that any bank has to keep with…

Q: The legal reserve ratio is 0.2  Find the credit multiplier

A: The data presented in the question above is:- Legal reserve ratio = 0.2 Credit Multiplier is to be…

Q: Government spending provided by passage of appropriations bills that set aside funds for specific…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: The rate of interest the Fed charges on loans to member banks is Prime rate Discount rate Federal…

A: The Federal Reserve, often referred to as the Fed, is the central bank of the United States. It…

Q: On any given day, banks with insufficient reserves can borrow from banks with excess reserves. The…

A: The term "excess reserves" refers to the sum held or deposited with the major or central regulatory…

Q: Bank Regulation Describe two ways in which bank regulation has hurt the banking system.

A: The banking regulation means making laws that helps in governing the banks and to protect the banks…

Q: The purchase of government securities from the public by the Central Bank will cause: the money…

A: The purchase of government securities from the public by the Central Bank is the monetary policy…

Q: what is the purpose of the national credit act

A: In a market, various acts are implements to protect the interest of the market participants. The…

Q: The initial condition of the banking system is as follows: $150 billion in reserve, $1,350 billion…

A: The banking system holds: Reserves of $150 billion Loans & Investments of $1350 billion Deposits…

Q: Which of the following is NOT the service provided by the Federal bank in U.S.? Group of answer…

A: The Federal Reserve Bank, commonly known as the Federal Reserve or simply the Fed, is the central…

Q: Only one statement is 100% correct. Which one? State agencies charter and regulate national…

A: In United States, OCC, Federal Reserve, FDIC, & State Bank Regulators are the supervisors and…

Q: A company that has $70 billion in assets and $20 billion in net worth must include $50 billion in…

A: Anything that has a monetary value to the owner is considered an asset. In other words, assets can…

Q: The federal funds rate is the interest rate that:

A: The “federal funds rate” is like the interest on that loan – it’s what the bank with extra reserves…

Q: Outline three (3) tools that can be used by the central bank to reduce the money supply

A: The important monetary policies that are used by the central bank of nation to control the money…

Q: A bank's reserves include its Multiple Choice vault cash and deposits with the Federal Reserve.…

A: Every bank is required to hold reserves by the central bank

Q: Which of the following is CORRECT?   the Fed Funds market is a Federal Reserve-operated market…

A: When talking about Federal Funds market, it is the place where banks can borrow money from each…

Q: To reduce the money supply in the economy, the Fed would: engage in actions to increase interest…

A: The central bank of a country controls the money supply in the economy.  The central bank conducts…

Q: The total assets of commercial banks in 2018 amounted to about Multiple Choice three times nominal…

A: GDP: The GDP or the gross domestic product can be defined as the value of the final goods and…

Q: The rate at which the FED lends money to commercial banks is the

A: Fed lend money to commercial bank with an interest rate.

Q: If the supply of financial capital increases   Interest rates will remain unchanged.   Interest…

A: Interest rate is determined by the demand and supply of financial capital.

Q: The most important advantage of discount policy is that the Fed can use it to perform its role as…

A: By raising or lowering interest rates, the central bank can control the flow of money in the economy…

Q: arantees that depositors will not lose money even if th

A: Money is the main & most important ‘medium of exchange’ in an economy. Through these medium…

Q: Which of the following scenarios would result in a decrease in a bank's capital ratio? Check all…

A: The capital ratio of a bank is the percentage of a bank's capital to its risk-weighted assets. A…

Q: Identify whether it is true or false BANK RATE IS A QUALITATIVE METHOD OF THE CREDIT CONTROL IN THE…

A: According to the given question Option is FALSE Reason BANK RATE IS NOT AN QUALITATIVE METHOD OF THE…

Q: How can the bank meet an expected net deposit drain of 4%?

A: A Bank is defined as an institution which deals with money transactions and provides money related…

Q: The Federal Reserve bank is managed by :one person elected in the same election that decides the…

A: The Federal Reserve bank is the central banking system of the United States of America.

Q: If a borrower defaults on a home loan, the bank is likely to do all of the following except -- sell…

A: In finance, default is failure to meet the legal obligations of a loan

Q: A decrease in the discount rate: leads to an increase in the interbank rate charged by commercial…

A: The discount rate is one of the tools of monetary policy.

Q: which of the following is not an objective of regulation and supervision of banks? To protect the…

A: Objective of Banks as a financial institution is to accept the money deposited by the people and…

Q: List four argumnets that favor a central Bank that is brought under the control of goverment

A: A central bank is a national institution that offers banking and financial services to other…

Q: The possibility that the failure of one bank affects the performance of other banks is called:…

A: When there will be a shortage of liquidity within commercial banks, then bank failure may occur. The…

Q: Will the additional $400,000 which was deposited in the Second National Bank affect the new loan?

A: In a banking system known as fractional reserve banking, banks are only obligated to maintain a…

Q: From an economics standpoint, the main benefit of a healthy banking industry is the fact that…

A: Banking implies the financial activities, services, and operations conducted by institutions known…

Q: In principle, securitizations are useful because, they allow a bank to transfer the operational risk…

A: A financial process where various financial assets, such as loans, mortgages, or receivables, are…