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Prior to 2008, bank managers in the U.S. looked on reserve requirements ____.
A) as a tax on deposits
B) as a subsidy on deposits
C) as a subsidy on loans
D) as a tax on loans
Answer: A
Diff: 1 Type: MC Page Ref: 248
Skill: Recall
Objective List: 11.2 Examine financial innovation and the growth of the "shadow banking
system"
Prior to 2008, a U.S. bank's cost of holding reserves equaled ____.
A) the interest paid on deposits times the amount of reserves
B) the interest paid on deposits times the amount of deposits
C) the interest earned on loans times the amount of loans
D) the interest earned on loans times the amount on reserves
Answer: D
Diff: 1 Type: MC Page Ref: 248
Skill: Recall
Objective List: 11.2 Examine financial innovation and the growth of the "shadow banking
system"
Prior to 1980, the Fed set an interest rate ____ that is a maximum limit on the interest
rate that could be paid on time deposits.
A) floor
B) ceiling
C) wall
D) window
Answer: B
Diff: 1 Type: MC Page Ref: 248
Skill: Recall
Objective List: 11.2 Examine financial innovation and the growth of the "shadow banking
system"
The process in which people take their funds out of the banking system seeking higher-
yielding securities is called ____.
A) capital mobility
B) loophole mining
C) disintermediation
D) deposit jumping
Answer: C
Diff: 1 Type: MC Page Ref: 248
Skill: Recall
Objective List: 11.2 Examine financial innovation and the growth of the "shadow banking
system"