Marcoeconomics an der FHNW - Fachhochschule Nordwestschweiz | Karteikarten & Zusammenfassungen

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TESTE DEIN WISSEN

Which of the following assets would you classify as being the most liquid?

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TESTE DEIN WISSEN

demand deposits

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TESTE DEIN WISSEN

What is Keynesian economy

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Economic slumps are caused by inadequate spending, and they can be
mitigated (abgeschwächt) by government intervention.

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TESTE DEIN WISSEN

What is shadow banking?

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TESTE DEIN WISSEN

As the financial crisis showed us, there are many large financial firms that don’t accept deposits—so aren’t covered by insurance or regulation that make conventional banks safer. 


These ”shadow banks” include: 

– investment banks 

– insurance companies 

– hedge fund companies 

– money market fund companies

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TESTE DEIN WISSEN

Suppose the required reserve ratio initially is 10% of bank deposits and is increased by the Fed to 20% of bank deposits. Holding everything else constant, this will:

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All answers are correct

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TESTE DEIN WISSEN

Only half of M1 is currency; where does the rest of the money supply come from?

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Bank deposits make up half of M1 and most of M2.

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How do banks create money?

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by accepting deposits and making loans, banks and other financial institutions are also able to create money.

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TESTE DEIN WISSEN

Why is the actual money multiplier smaller?

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The money multiplier is the ratio of the money supply to the monetary base. 


In normal times, the U.S. money multiplier for M1 is between 1.5 and 3.0. 

– Why isn’t it 1/0.1 = 10? 

  • People hold significant amounts of cash, which reduces bank deposits.
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TESTE DEIN WISSEN

What is a T-Account?

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a tool for analyzing a business's financial position by showing the business's assets and liabilities.

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Bank regulation: Deposit Insurance

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TESTE DEIN WISSEN

Deposit insurance: a guarantee that a bank’s depositors will be paid even if the bank can’t come up with the funds


- The FDIC (Federal Deposit Insurance Corporation) currently guarantees the first $250,000 of each account for member banks

- The FDIC started to operate January 1st 1934  

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Definition of bank reserves

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The currency that banks hold in their vaults, plus their deposits at the Federal Reserve

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What banks do?

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TESTE DEIN WISSEN

Banks are financial intermediaries that use liquid assets (in the form of bank deposits) to finance the illiquid investments of boeeowers.

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What is the nominal GDP?

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The value of all final goods and services produced in the economy during a given year, calculated using the prices current in the year in which the output is produced.

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Q:

Which of the following assets would you classify as being the most liquid?

A:

demand deposits

Q:

What is Keynesian economy

A:

Economic slumps are caused by inadequate spending, and they can be
mitigated (abgeschwächt) by government intervention.

Q:

What is shadow banking?

A:

As the financial crisis showed us, there are many large financial firms that don’t accept deposits—so aren’t covered by insurance or regulation that make conventional banks safer. 


These ”shadow banks” include: 

– investment banks 

– insurance companies 

– hedge fund companies 

– money market fund companies

Q:

Suppose the required reserve ratio initially is 10% of bank deposits and is increased by the Fed to 20% of bank deposits. Holding everything else constant, this will:

A:

All answers are correct

Q:

Only half of M1 is currency; where does the rest of the money supply come from?

A:

Bank deposits make up half of M1 and most of M2.

Mehr Karteikarten anzeigen
Q:

How do banks create money?

A:

by accepting deposits and making loans, banks and other financial institutions are also able to create money.

Q:

Why is the actual money multiplier smaller?

A:

The money multiplier is the ratio of the money supply to the monetary base. 


In normal times, the U.S. money multiplier for M1 is between 1.5 and 3.0. 

– Why isn’t it 1/0.1 = 10? 

  • People hold significant amounts of cash, which reduces bank deposits.
Q:

What is a T-Account?

A:

a tool for analyzing a business's financial position by showing the business's assets and liabilities.

Q:

Bank regulation: Deposit Insurance

A:

Deposit insurance: a guarantee that a bank’s depositors will be paid even if the bank can’t come up with the funds


- The FDIC (Federal Deposit Insurance Corporation) currently guarantees the first $250,000 of each account for member banks

- The FDIC started to operate January 1st 1934  

Q:

Definition of bank reserves

A:

The currency that banks hold in their vaults, plus their deposits at the Federal Reserve

Q:

What banks do?

A:

Banks are financial intermediaries that use liquid assets (in the form of bank deposits) to finance the illiquid investments of boeeowers.

Q:

What is the nominal GDP?

A:

The value of all final goods and services produced in the economy during a given year, calculated using the prices current in the year in which the output is produced.

Marcoeconomics

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