Prior to the financial crisis of 2007-2009 banks did all but which of the following to bulk up their profit:
A. colluded to fix benchmark interest rates.
B. traded securities for customers.
C. purchased equities for their own account.
D. bought or sponsored hedge funds.
Answer: A
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Rent controls
A) create a deadweight loss. B) increase maintenance by landlords. C) benefit people who live in rent controlled apartments. D) Both answers A and C are correct. E) Both answers B and C are correct.
When a country adds more capital to its existing stock:
A. the additional productivity is less than the previous increases to productivity. B. the additional productivity is more than the previous increases to productivity. C. it experiences rapidly increasing rates of growth. D. it experiences rapid declines in its level of income.
During the second half of 2008, the Fed approximately doubled the reserves of the commercial banking system. As a result, the M1 money supply
a. fell sharply, because the banks used the excess reserves to extend additional loans. b. also approximately doubled. c. was unchanged, because bank reserves will not affect the M1 money supply. d. increased, but by a much smaller amount, because the banks used only a small portion of their excess reserves to extend additional loans.
The normal rate of unemployment around which the unemployment rate fluctuates is called cyclical unemployment
a. True b. False Indicate whether the statement is true or false