QUESTION 21 The Fed has reshaped credit markets on a grand scale and moved us fu

Question

QUESTION 21

The Fed has reshaped credit markets on a grand scale and moved us further away from a free market system.

True

False

2 points   

QUESTION 22

One viewpoint is that the 1978 Humphrey - Hawkins Act strengthened the Full-Employment Act of 1946, while others believe it weakened the government's role by imposing mandates on the Federal Reserve that are at cross-purposes.

True

False

2 points   

QUESTION 23

There was a resurgence of Austrian economics during the 1980s under the tutelage of President Ronald Reagan.

True

False

2 points   

QUESTION 24

We have become a nation of rules wherein rules and not people rule.

True

False

2 points   

QUESTION 25

The foreign sector can be procyclical because the more we trade with foreign nations, the more external events affect us.

True

False

2 points   

QUESTION 26

A derivative is

another name for stocks and bonds.

a government security.

a bet between two parties on the outcome of some future event.

the name stocks that pay dividends.

2 points   

QUESTION 27

Standard and Poor's and Moody's get their money from what source?

Depositors.

The federal government.

Companies they rate.

The derivatives market.

2 points   

QUESTION 28

Economists consider credit default swaps derivatives because values are derived from the underlying securities which the CDS is insuring against default.

True

False

2 points   

QUESTION 29

The purpose of the Glass-Steagall Act of 1933 was to prevent banks from putting depositors' money to great risk.

True

False

2 points   

QUESTION 30

Before 1999, investment banks were regulated.

True

False

another name for stocks and bonds.

a government security.

a bet between two parties on the outcome of some future event.

the name stocks that pay dividends.

Explanation / Answer

21.False

Fed focuses upon the economic development with stability in prices, using the monetary policies. It does not take away the soul of market economy.

24. True

It is the rule that governs the nation. If it is the people, then it will conflicting in nature.

25. True

Doing more trade with rest of the worlds, is part of the globalization and the domestic economy will be more affected due to the foreign events in case of globalization.

26. C

A derivative deals with the outcome of the any future event. Hence it is considered as a bet.

27.C

These are the rating agencies that rate the companies upon their request (as part of mandatory criteria before issuing any financial instruments). In return of their services, the companies pay to the rating agencies.

28. True

A derivative drives its value from the asset from that, it is created. It is also the case with the CDOs.

29. True

The act was in response of the huge number of closures of the banks during the great depression of 1933s. It made the separation of investment banking from the commercial banking and prevented banks from getting involved in high risk investment.

30. True

It was the Glass Steagall Act of 1933 that was used to regulate the investment banking other than the FTC act. The Glass Steagall Act of 1933, separated the investment banking from the commercial banking.

Pl. repost other unanswered questions for their proper answers!

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