Describe at least three ways that global capital markets are different today from what they were like in the late 19th century
What will be an ideal response?
There are more varieties of financial instruments available. A major difference is that exchange rates were fixed then which meant less exchange rate risk and uncertainty then and now higher costs and transactions volume given the need to manage that risk. Transaction costs are significantly lower today than in the past.
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A major controversy involving the banking industry in its early years was
A) whether banks should both accept deposits and make loans or whether these functions should be separated into different institutions. B) whether the federal government or the states should charter banks. C) what percent of deposits banks should hold as fractional reserves. D) whether banks should be allowed to issue their own bank notes.
The expectation of a random variable X that can take on any of N possible values, Xi with probability Pr[Xi], is denoted as E[X] and defined as:
a. E[X]=???XiPr[Xi]. b. E[X]=??XiPr[Xi]. c. E[X]=?XiPr[Xi]. d. E[X]=?XiPr[Xi].
A good economic theory: a. rests on realistic assumptions
b. explains economic behavior and predicts well. c. can best be expressed mathematically. d. always provides a highly detailed analysis of an economic sector.
The assets that appear on the central bank's balance sheet include the category of loans. Who are central banks lending to and are these loans associated with the central bank functioning as the government's bank? Explain.
What will be an ideal response?