1)
An unusual feature of the “Great Recession” in the U.S. from
2007-2009 was that the crisis did not spread to European nations.
Answer:
2)
A financial crisis occurs when information flows in
financial markets experience a particularly large disruption.
Answer:
3)
In the years just prior to the global financial crisis, mortgage
loans were issued to borrowers with no income or employment.
Answer:
4)
Effective screening and information collection together form an
important principle of credit risk management.
Answer:
5)
When the real interest rate is low, there are greater incentives
to borrow and fewer incentives to lend.
Answer:
6)
Which of the following statements is correct, concerning price
stability as a monetary goal?
A) In the long run, inconsistencies exists between the price
stability goal and the
other goals, such as high unemployment.
B) In the short run price stability does not conflict with the
goals of high employment and interest-rate stability.
C) Neither A nor B is true.
D) Both A and B are correct.
Answer:
7)
First National Bank
Table 23.1
Refer to Table 23.1. Assuming that the average duration of its
assets is five years, while the average duration of its
liabilities is three years, a rise in interest rates from 5% to
10% will cause the net worth of First National to ________ by
________ of the total original asset value.
A) increase; 11%
B) decline; 11%
C) increase; 10%
D) decline; 5%
Answer:
8)
Currently, there are ________ countries that are members of the
European Monetary Union.
A) 10
B) 17
C) 15
D) 20
Answer:
9)
In Argentina, the primary force leading to their financial crisis
in 2001 was ________.
A) fiscal mismanagement on the part of the government
B) financial liberalization
C) fraud in financial markets
D) all of the above
