Question

1a.

To which of the following does the Fed, as used in the United States, refer?

The country’s central bank

The Treasury Department

The federal government

The Federal Deposit Insurance Corporation

b.

If a bank’s assets and its liabilities are equal, the bank is said to be _______.

insolvent

in balance

maximizing its profit

fully utilizing its resources

c.

The possibility that borrowers will not be able to repay their loans on time or in full is known as ________ risk.

credit

default

market

liquidity

d.

Transaction deposits include which of the following?

Demand deposits

Saving deposits

Time deposits

Certificates of deposit

e.

Assets of commercial banks can include which of the following?

Cash, securities, and loans

Deposits, securities, and loans

Net worth and bank borrowing

Deposits and net worth

Answer 1

A) the federal reserve of the United States is the central bank of the country because it has the function of regulating the financial activities of commercial banks as well as a sole control over the money supply

B) this is a situation in which the bank is said to be in balance. This is because it is maintained under the balance sheet where the assets and liabilities are equal to each other

C) This is called the default risk borrowers are likely to default on the loan acquired

D) Transaction deposits include the deposits which can be readily taken out as cash. This includes demand deposits and other checkable deposits.

E) cash securities and loans.