Which of the following is intended to prevent bank runs? the Sherman Anti-Trust

Question

Which of the following is intended to prevent bank runs? the Sherman Anti-Trust Act regulation Q. which prohibits banks from paying interest on demand deposits deposit insurance maturity transformation In an asset bubble: depositors withdraw their deposits from banks until the bank fails. the price of an asset is pushed to an unreasonably high level because of expectations of further price gains. the price of an asset falls because demand for the asset is so high. savers and investors engage in maturity transformation by long-term borrowing and making short-term loans to take advantage of interest rate increases. A sudden and widespread disruption of financial markets that occurs when people lose faith in the liquidity of financial institutions and markets is a(n): asset bubble. maturity transformation. financial panic._ debt overhang. Ireland's rapid growth came to a halt in 2008 because: the potato crop was destroyed by bad weather. the central bank of Ireland refused to accept the euro. of a real estate bubble. of the failures of many shipping companies. The Fed usually responds to a recession by: buying short-term government debt from banks. selling short-term government debt to banks. raising interest rates. increasing reserve requirements. During the financial crisis of 2008, the Fed: was closed for a three-week bank holiday by President George W. Bush. remained open but was severely limited in its operations. was merged with the Treasury Department to increase its power to deal with the crisis. expanded its operations by lending to institutions other than commercial banks and buying financial assets other than Treasury bills.

Explanation / Answer

45. b. Regulation Q - This move was made, in part, to increase banking reserves to militate against credit illiquidity that was experienced in the initial days of the 2008-2009 credit crisis.

46. b. The price of  rise so sharply and at such a sustained rate that they exceed valuations justified by fundamentals making sudden collapse

47.c. In event of financial panic bank depositors attempt to withdraw their deposits, equity holders sell stock, and market participants in general seek to liquefy their assets

48. c. When the international financial crisis erupted in August 2007, Irish banks were left vulnerable and exposed. With falling property prices, banks began to suffer huge losses on their loans

49. a. In 2008 recession Fed has loaned security to help banking system survive

50. d

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