37. Rank the following items in terms of least liquid to most liquid. a) my hous

Question

37. Rank the following items in terms of least liquid to most liquid. a) my house, government bonds, a check from your mom, cash b) cash, credit cards, government bonds, checkable deposits c) cash, a check from your mom, government bonds, Microsofy stock certificates d) checkable deposits, my house, savings bonds, cash 38. Bank panics have largely disappeared in the U.S. because of very low interest rates following the Great Recession a) True b) False 39. When the Federal Reserve conducts open market transactions, it a) makes credit available to financial institutions in crises. b) buys or sells corporate bonds in the bond market. c) issues government bonds to raise funds for the government. d) buys or sells previously issued government bonds. The discount rate is the interest rate commercial banks charge each other for overnight loans. a) True b) False 40.

Explanation / Answer

37. a) My house, government bonds, a check from your mom, cash.

b) Government bonds, checkable deposits, credit cards, cash.

c) Government bonds, Microsoft stock certificates, a check from your mom, cash.

d) My house, savings bonds, checkable deposits, cash.

38. b) False.

(Bank panics have largely disappeared not because of low interest rates, but because of deposit insurance)

39. b) It buys or sells corporate bonds in the bond market.

40. b) False.

(Discount rate is the interest rate charged to commercial banks for loans received from the Federal Reserve’s discount window)

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