Econ 3030 - Money, Banking and the Economy » Fall 2021 » Quiz 9

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Question #1
The Argentine crisis, which among other things saw the value of its currency fall dramatically, has its origin in a tight monetary policy.
A.   TRUE
B.   FALSE
Question #2
The decline in real estate prices helped trigger the subprime loan crisis of 2006-2008.
A.   TRUE
B.   FALSE
Question #3
In the wake of the Great Recession, the AIG and Goldman Sachs paid handsome bonuses to their officials despite a big loss in corporate earnings. This scandal directly illustrates A. Conflict of interest B. Moral Hazard C. Asymmetric Information D. Free rider
A.   D
B.   B
C.   C
D.   A
Question #4
What does not seem to be a cause of financial crises? A. Inflation B. asset bubbles C. spikes in interest rates D. fiscal balance
A.   D
B.   B
C.   C
D.   A
Question #5
Which is not related to the Great Recession? A. Subprime loans B. Dodd-Frank C. Sarbanes Oxley D. CDOs E. Bear Stearns
A.   E
B.   A
C.   D
D.   C
E.   B
Question #6
Disclosure requirements help encourage excessive risk taking by banks.
A.   FALSE
B.   TRUE
Question #7
Disintermediation occurred at the time of the 1980s S&L crisis.
A.   FALSE
B.   TRUE
Question #8
FDIC helps encourage excessive risk-taking by banks
A.   TRUE
B.   FALSE
Question #9
Collateralized Debt Obligations (CDO) or CMOs, on average, have less risk than Certificate of deposits.
A.   FALSE
B.   TRUE
Question #10
According to the Credit Default Swap video, as the GM's credit rating worsens, the insured is called to pay in _______ collateral by the insurer.
A.   exactly the same
B.   less
C.   more

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