What is the liquidity trap

when monetary policy becomes ineffective due to very low interest rates

What are cheque deposits?

Deposits against which cheques can be issued for withdrawing money

What is a money multiplier

It refers to the fraction by which commercial banks can multiply money

give an example of the 'stress test'

Measure Commerical Bank Reserves to assess reslience vs a shock

An institution that receives funds from the public and gives loans

What is Macro-Prudential Regulation?

Monitering, Identifying and Acting to remove risks

What does monetary policy involve?

influencing the supply and demand for money

Imposing rules and laws which limit freedom of individuals.

How does monetary policy affect economic growth?

central banks ensure that money supply is controlled

state the definition for Financial Regulations

Imposing rules and laws which limit the freedom of finical agents

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Financial Markets

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Questions 20

Answers

1
Which of the following Is a financial market?
I have no clue
tertiary market
backward market
capital market
2
What is the liquidity trap
figlting inflation
when monetary policy becomes ineffective due to very low interest rates
desired level of money flow
none of the above
3
what are the functions of commercial banks
All of the above
Advancement of loans
Credit creation
Discounting bills of exchange
4
What are cheque deposits?
none of the above
Deposits against which cheques can be issued for withdrawing money
It refers to the fraction by which commercial banks can multiply money
Deposits against which cheques can not be issued for money withdrawal
5
state a reason that it's vital to ensure Smooth functioning of systems
Lending and Repayment of Money
other banks trigger a collapse of the financial system
they may do a stress test or make reccomendations
none of the above
6
Who regulates financial markets in the UK?
DOW
The Bank of England
Global markets
None of the above
7
What is a money multiplier
It refers to the fraction by which commercial banks can multiply money
Banker to the government
Lenders of the last resort
acceptance of deposits
8
give an example of the 'stress test'
Measure Commerical Bank Reserves to assess reslience vs a shock
banks are adequately capitalised and they pose no risk to the real economy
All of the above
banks engaing in riskier investments
9
What is a bank?
Overdraft facility
A profit making financial institution
An institution that receives funds from the public and gives loans
Overdraft facility
10
What is Macro-Prudential Regulation?
banks trigger a collapse of the financial system
none of the above
refers to the risk of a breakdown of the entire financial system
Monitering, Identifying and Acting to remove risks
11
What does monetary policy involve?
policy shock
none of the above
influencing the supply and demand for money
open market operations
12
State a function of a central bank
Rationing of credit
Moral suasion
direct action
Lenders of the last resort
13
What is regulation?
Imposing rules and laws which limit freedom of individuals.
Imposing rules and laws which limit the freedom of finical agents.
Concerned with identifying, monitoring and eating to remove risks
Focuses on ensuring the stability of individual banks and other institution
14
Is regulation becoming more common in the UK?
Yes
Maybe
No
Neither
15
Define Cash reserve ratio
None of the above
rate at which commercial banks can borrow funds
all of the above
Percentage of total deposits
16
Which of the following is a function of money:
None of the above
Trading
A standard of deffered payment
Narrow money
17
How does monetary policy affect economic growth?
none of the above
other banks trigger a collapse of the financial system
decreases economic growth
central banks ensure that money supply is controlled
18
On what date was the Big Bang Policy formed?
1986
1987
1988
1985
19
state the definition for Financial Regulations
Imposing rules and sometimes laws which limit the freedom of individuals
none of the above
Imposing rules and laws which limit the freedom of finical agents
Concerned with identifying, monitoring and eating to remove risks
20
What are the functions of a central bank
Banker to the government
acceptance and deposits
agency functions
advancement of loans

Financial Markets Flashcards | StudBud