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1.   Fitch Ratings Inc. downgrades banks credit ratings. A.  How does this affect borrowers, lenders, and financial institutions? B.  What are the implications of this downgrade to the health of the financial system?

When banks have deposits in checking accounts with the Fed, these deposits for the bank are __________________ of the commercial bank   a. Liabilities   b. Assets   c. Net Worth   d. Equity

What is a financial bubble in the context of asset markets? A. A situation where asset prices are stable and reflect intrinsic value B. A sudden and unsustainable increase in asset prices followed by a crash C. A government policy to regulate asset markets D. A situation where asset prices are controlled by a single entity

Topic: Banks and the Economy   For an economy to thrive, there must be a strong banking system. If the banks fail and must be bailed out, it will have an effect on the economy.   If people lose faith in the safety and security of financial institutions, what will happen to the U.S. economy?   Please use at least 100 words in your response.

Question 2 "Financial intermediaries are institutions that borrow funds from savers and lend them to borrowers, providing risk sharing, liquidity and information services in the process." If these are some of the functions of financial institutions, how do you explain the impact of these functions on: 1. İnvestor's decisions 2. The economy 3. Financial markets Question 3 How the following events affect interest rates? Be clear in your answer. 1. An earthquake destroys bridges and roads in Turkey, leading to increased investment spending for rebuilding the infrastructure. 2. Future taxes of businesses are expected to be increased. 3. Corona pandemic is forcing people to stay home to protect themselves and spend less money than usual. 4. The government proposes a new tax on savings.

Which of the following factors pose a limit on the ability of commercial banks to increase the quantity of money in circulation by extending new loans? Select one or more: a. the quantity of Central Bank reserves that they own b. the quantity of money that savers lent to them by opening deposits c. the behavior of households and firms, which reduce the quantity of money in circulation by repaying previous loans. d. the availability of profitable lending opportunities in the economy e. the willingness of household and firms to take up new debts at the given interest rate

Identify which item is not one of the six parts of the financial system. Answer a. Credit cards b. Financial institutions c. Central banks d. Financial markets

Buying and selling government securities to financial institutions is called:   A. Open market operations   B. Sales of stocks and bonds   C. Growth of the Money Supply   D. Closed market operations

Identify which item is not one of the six parts of the financial system. a. Credit cards b. Financial institutions c. Central banks d. Financial markets

Which of the following was an underlying cause of the economic crisis of 2008? a. The imposition of government regulations on Fannie Mae, Freddie Mac, and other lending institutions that eroded the conventional lending standards in place prior to the mid-1990s b. A failure of government to impose regulations on Fannie Mae, Freddie Mac, and other mortgage lenders c. Federal housing regulations that made it difficult for Fannie Mae, Freddie Mac, and other lending institutions to obtain sufficient loanable funds for the finance housing construction

The sharp increase in housing prices in the lead up to the financial crisis was fueled by all of the following EXCEPT  a. ability of borrowers to easily borrow without putting the usual 20% down-payment on the house b. expectations that home prices would continue to increase c. high inflation rates d. deterioration of income and credit requirements on much mortgage lending

For each of the following economic changes, predict what will happen to equilibrium interest rate and quantity of money in the financial market. Sketch a demand and supply diagram to support your answers.  Banks that have made loans find that a larger number of people than they expected are not repaying those loans.       2.Because of the pandemic, people become uncertain about their economic future. 3.  BSP buys dollars from the public to increase its foreign exchange reserves.

Please look up the definition of Hyperinflation and cite examples of 3 countries that have experienced it.  What happened to the money of citizens in those countries?  If the United States ever experienced a period of time in which the value of the US Dollar became worthless (hyperinflation), how could you safeguard your assets?   What can you invest in today that would help you to survive during a period of economic uncertainty such as hyperinflation?  What would you do if you were unable to get cash out of an ATM or use a credit card to pay for purchases?

1. Statement I. In the Philippines, financial intermediaries are restricted in what they are allowed to do and what assets they can hold.Statement II. Money supply is the availability of financial resources for deployment in the financial system. It is making the money available for use or for trade or investment. a. Both statements are true.b. Both statements are false.c. Statement I is true; Statement II is false.d. Statement I is false; Statement II is true. 2.A commercial paper is defined as, except: a. Unsecured promissory notes that are only issued by large and credit worthy enterprises. b. Directly issued to the buyer, no secondary market. c. May have stated interest rate or sold at discounted basis. d. None of the above

In economics, what does the term liquidity refer to? A. The ease with which an asset can be converted into cash without loss of value B. The level of profitability of a firm C. The degree of government intervention in the market D. The price of goods and services in an economy

23. An understanding of the state of the economy, projections on economic growth, the floor framework, and the way the Federal Reserve works allows you to: a. understand which way interest rates might change. b. accurately forecast the spread between short-term and long-term interest rates. c. predict the size of the future output gap. d. predict the exact inflation rate in the future.

If loans become far less available, then sectors of the economy that ______________ like business investment, home construction, and car manufacturing can be dealt a crushing blow. a.typically generate extraordinary gains b. make loans to financial capital markets c.failed to diversify risk d. depend on borrowed money

Why is it important for the central bank of a country to be independent? (i) The central bank needs to be free from political pressures. (ii) Research has shown that inflation tends to be lower where central banks have greater independence. (iii) The central bank needs to ensure that it has the freedom to set the federal funds rate at one fixed level. (iv) The central bank needs to ensure that the Federal Reserve governor never has to testify before Congress. (i) and (ii) (ii) and (iv) (ii) and (iii) O (i), (iii), and (iv)

A successful entrepreneur may need a support of banking institutions and Non- banking financial institutions. Being an entrepreneur, which non- banking financial institutions help is required to run the business smoothly?

Banks that are too-big-to-fail refers to: a. Banks with multiple branches and a large number of depositors. b. Banks that are viewed by regulators as being too big to be closed and liquidated without imposing a systemic risk to the banking and financial system. c. Banks that are too profitable to declare bankruptcy. d. Any financial institution that accepts deposits from the general public.

Exercises/Drills: Exercise 1: Form groups. Each group will be given a question to answer. 1. Discuss the meaning of financial system. What is its importance to the nation? 2. Identify the different participants in the financial system and discuss their roles. 3. What is BSP? What is its role in the well-being of the Philippines? 4. What is monetary policy? What is its importance in the economy? 5. What are the different tools of monetary policy? Discuss how the tools of monetary palicy influence money supply and interest rates? Evaluation: What I have learned... Reflect on the lesson by completing the following statements: I learned that I. I was surprised that I.. I noticed that I.. I discovered that I... I was pleased that I...

Banking Crises: 1) Banking crises have occurred throughout the world. What similarities do we find when we look at the different countries? Behavior of the Money Supply : 1929-1933 2) The monetary base increased by 20% during the contraction of 1929-1933, but the money supply fell by 25%. Explain why this occurred. How can the money supply fall when the base increases?

Investors in Bahrain are complaining that there is not enough credit that are being made available for them. Interest rates are low but still there are not many lenders of money who are willing to lend their money. What appropriate monetary policies can be implemented in this case? a.Decrease income taxes and increase government spending b.Increase cash reserve ratio and increase interest rates a little to encourage lenders c.Decrease cash reserve ratio and increase interest rates a little to encourage lenders d.Decrease cash reserve ratio and decrease interest rates a little to encourage lenders

Millennials Should Shop Around for Banks Banks are in business to make money for their shareholders, not to put the interests of customers first. This key fact should not be overlooked. Banks sell financial services and compete hard for business. They want to be seen as the friend of students and offer no-cost accounts. But banks are not equal. By shopping around, you can get the deal thať's best for you. Source: The Globe and Mail, September 19, 2016 Why would banks want to be seen as friends of students and offer student accounts with no charges? Banks want to be seen as friends of students and offer student accounts with no charges O A. to maximize profit O B. because it is good public relations OC. to increase liquidity O D. because they care about the future generation

11. _______________ is responsible for serving individual and business organizations in terms of mobilizing funds. a. International monetary fund b. Financial system c. None of the options d. Global money exchanges

D Inflation can impose significant costs and adversely distort economic systems. Indicate whether the costs and distorting effects exemplify menu costs, shoe leather costs or unit of account costs. a. discourages people from holding money c. can lead to stores listing prices in more stable currencies e. makes money a less reliable source of measurement g. causes difficulty in firms and individuals financial planning b. can reduce the quality of economic decisions d. spending time converting money into something that better holds value f. can cause distortion to the tax system h. causes costs associated with changing prices in stores