Question

QUESTION 32

Are profitable, well-managed banks generally immune to a “run on banks?”

a. only if the government does not interfere with them b. Yes c. No d. There is no way to tell ahead of time e. Only on weekdays

QUESTION 33

In the U.S. and other developed countries, the national debt is measured in billions and trillions of dollars (or the equivalent in other currencies). Money of these magnitudes is almost impossible to comprehend. The better way to measure national debt is to calculate

a. debt per capita b. hidden debt divided by visible debt c. the debt/GDP ratio d. real debt e. the debt/interest rate ratio

QUESTION 34

What specific action by a central bank produces “monetized debt?” a. The Federal Reserve issues more currency b. The Federal Reserve buys bonds issued by the U.S. Treasury c. The U.S. Treasury buys debt issued by the Federal Reserve d. The World Bank buys U.S. debt and issues Certificated Of Deposit based on the debt collateral e. Foreign governments buy bonds issued by the U.S. Treasury Department

Answer 1

32 (B) yes

reason  well-managed banks generally immune to a “run on banks" as they would be operated, managed, and controlled with proper guidelines and supervision.

33 c. the debt/GDP ratio

the debts as percentage of GDP is good measure to justify the national debts as it shows that what percentage of GDP is dedicated to debt for nation.

34 (A)

when federal reserve issue more  currency it increases the money supply to support the debt in the economy. it purchase government bond or security in the open market to monetize the debt in favor of government.