Question

1) If the bank supervisors find that a bank has low or negative net worth, or is making too high a proportion of risky loans, they can _________.

Select the correct answer below:

a) force the bank to be sold to a financially healthy bank

b) force the bank to close

c) require changes to be implemented that reduce risky behaviors

d) all of the above

2) After a recession, _____.

Select the correct answer below:

a) the economy's internal structure does not usually revert to its exact earlier shape

b) the economy no longer has an internal structure

c) the economy's internal structure is permanently altered

d) the economy's internal structure reverts back to ts exact earlier shape

3) What strategies has the Congress put into place to protect against bank runs?

Select the TWO correct answers below.

Select all that apply:

a) deposit insurance

b) debt ceiling

c) lender of last resort function for the Fed

d) limits to the Fed's ability to control the money supply

4) Contractionary fiscal policy leads to:

Select the correct answer below:

a) a shift of the aggregate demand outward

b) a movement down along the aggregate demand curve

c) a shift of the aggregate demand inward

d) a movement up along the aggregate demand curve

5) Crowding out is a term used to explain which of the following?

Select the correct answer below:

a) when exports consistently exceed imports

b) when domestic investment does not equal domestic savings

c) when government borrowing and spending results in higher interest rates

d) when government investment leads to increased inflation

6) Which of the following is included in the "payroll tax"?

Select all that apply:

a) Medicare tax

b) Social security tax

c) Sales tax

d) Personal income tax

Answer 1

1) If the bank supervisors find that a bank has low or negative net worth, or is making too high a proportion of risky loans, they can.

Select the correct answer below:

Ans. D) All of the Above.

If the bank reached at the situation where it has negative net worth or making too high proportion of risky loans then they can required changes to be implement to reduce risk or in extreme case they can force the bank to be close or sold to a financially healthy banks.

2) After a recession,

Ans. a) the economy's internal structure does not usually revert to its exact earlier shape

3) What strategies has the Congress put into place to protect against bank runs?

Ans. A) deposit insurance: Deposit Insurance is an type of insurance system that make sure depositors in a bank do not lose their money, even if the bank goes bankrupt. & C) lender of last resort function for the Fed

4) Contractionary fiscal policy leads to:

Ans. C)  a shift of the aggregate demand inward

5) Crowding out is a term used to explain which of the following?

Ans. C)  when government borrowing and spending results in higher interest rates

6) Which of the following is included in the "payroll tax"?

Ans. a) Medicare tax

b) Social security tax

d) Personal income tax

It doesn't include sales tax