19. A bank provides: a. b. c. d. liquidity; that is, access to cash when and whe
ID: 1161255 • Letter: 1
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19. A bank provides: a. b. c. d. liquidity; that is, access to cash when and where you want it. liquidity; that is, it connects buyers to sellers to ease saving and borrowing risk diversification; that is, access to cash when and where you want it risk diversification; that is, connecting buyers and sellers to ease saving and borrowing 22. A booming economy can make investors: a. eager to borrow money, and shift the demand curve for loanable funds to the right. b. eager to borrow money, and shift the supply curve for loanable funds to the right c. wary of future downturns, and shift the demand curve for loanable funds to the left wary of future downturns, and shift the supply curve for loanable funds to the left. d. 33. The Federal Reserve: is fairly independent of the rest of government. b. works closely with the Treasury department. c. is easil d. has become an ineffective policy-making body in the last decade y swayed by political pressure 34. The discount window provides: guaranteed emergency funds for banks in trouble at a higher interest rate than a. others. b. loans to banks at low interest rates, scan lend more money out to the public. c. guaranteed emergency funds for ban trouble at a lower interest rate tharn others loans to banks at low interest rates, only when the economy is doing well d.Explanation / Answer
19. Option A.
A bank provides liquidity that is access to cash when and where you want.
It provides liquidity in sense that people can get money whenever they need it. It can be emergency saving that can be accessed in case of any emergency or financial crisis.
22. Option A.
A booming economy can make investors eager to borrow money and shift the demand curve for lonable funds to the right.
This decreases the risk of bonds and the investors loan their funds to borrowers.
33. Option a is correct.
The Federal Reserve is fairly independent of the rest of government.
It has two main responsibilities:
34. Option C.
The discount window provides guaranteed emergency funds for banks in trouble at a lower interest rates than others.
Fed uses discount window as a last resort for loans when ever there is emergency and charge lower interest rates and higher discount rates.
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