1) Prior to 2008, the bank”s cost of holding reserves equaled
A) the interest paid on deposits times the amount of reserves.
B) the interest paid on deposits times the amount of deposits.
C) the interest earned on loans times the amount of loans.
D) the interest earned on loans times the amount on reserves.
2) Prior to 1980, the Fed set an interest rate ________ that is a maximum limit on the interest rate that could be paid on time deposits.
A) floor
B) ceiling
C) wall
D) window
3) The process in which people take their funds out of the banking system seeking higher yielding securities is called
A) capital mobility.
B) loophole mining.
C) disintermediation.
D) deposit jumping.
4) Money market mutual funds
A) function as interest earning checking accounts.
B) are legally deposits.
C) are subject to reserve requirements.
D) have an interest rate ceiling.