the economics of money, banking, and financial markets

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3. 
   

   The Glass-Steagall Act, before its repeal in 1999, prohibited commercial banks from
   ____.
   A) issuing equity to finance bank expansion
   B) engaging in underwriting and dealing of corporate securities
   C) selling new issues of government securities
   D) purchasing any debt securities
   Answer: B
   Diff: 1 Type: MC Page Ref: 256
   Skill: Recall
   Objective List: 11.5 Understanding the four pillar approach to Canadian banking

   
   


4. 
   

   The primary reason for the recent reduction in the number of financial institutions is
   ____.
   A) financial failures
   B) re-regulation of banking
   C) restrictions on branching
   D) financial consolidation
   Answer: D
   Diff: 1 Type: MC Page Ref: 256
   Skill: Recall
   Objective List: 11.5 Understanding the four pillar approach to Canadian banking

   
   


5. 
   

   The ability to use one resource to provide different products and services is ____.
   A) economies of scale
   B) economies of scope
   C) diversification
   D) vertical integration
   Answer: B
   Diff: 1 Type: MC Page Ref: 256
   Skill: Recall
   Objective List: 11.5 Understanding the four pillar approach to Canadian banking

   
   


6. 
   

   The business term for economies of scope is ____.
   A) economies of scale
   B) diversification
   C) cooperation
   D) synergies
   Answer: D
   Diff: 1 Type: MC Page Ref: 256
   Skill: Recall
   Objective List: 11.5 Understanding the four pillar approach to Canadian banking