the economics of money, banking, and financial markets

328 $

© 2014 Pearson Canada Inc.$

7. 
   

   During the 1970s and early 1980s, most of the sovereign lending was ____ leading to
   ____ consequences.
   A) unregulated; near disastrous
   B) regulated; near disastrous
   C) illegal; serious legal
   D) regulated; serious legal
   Answer: A
   Diff: 1 Type: MC Page Ref: 262
   Skill: Recall
   Objective List: 11.7 Examine International Banking

   
   


8. 
   

   Canadian banks have most of their branches in ____.
   A) the U.S., Mexico, South America, Europe, and Asia
   B) Latin America, the Middle East, Mexico, and Europe
   C) Mexico, the Middle East, the Caribbean, and London
   D) South America, the Middle East, and the Caribbean
   Answer: A
   Diff: 1 Type: MC Page Ref: 262
   Skill: Recall
   Objective List: 11.7 Examine International Banking

   
   


9. 
   

   Foreign banks may enter the Canadian financial services industry ____ as a ____
   bank(s).
   A) either; schedule II or III
   B) either; schedule I or II
   C) only as; schedule II
   D) only; schedule III
   Answer: A
   Diff: 1 Type: MC Page Ref: 262 - 263
   Skill: Recall
   Objective List: 11.7 Examine International Banking

   
   


10. 
    

    Describe how was the Eurocurrencies market created.
    Answer: The most important of the Eurocurrencies are Eurodollars and this market was
    fathered—ironically—by the Soviet Union. In the early 1950s during the height of the Cold War
    the Soviets fearing that the U.S. would freeze its substantial dollar balances held by banks in the
    United States, they moved the deposits to Europe so that they would be safe from
    expropriatation. They also wanted to keep the deposits in dollars so that they could be used in
    their international transactions. When they moved their dollars in Europe the Eurodollar was
    born.
    Diff: 2 Type: SA Page Ref: 261
    Skill: Applied
    Objective List: 11.7 Examine International Banking