Exam 10: The Great Recession: a First Look

Refer to the following table when answering Table 10.2: Hypothetical Bank Sheet ($ millions) Column A Column B Loans \ 6,800 Deposits \ 7,500 Investments 3,700 Short Term Debt 300 Cash \& Reserves 1,100 long Term Debt 1,800 -Given the information in Table 10.2, this bank's liabilities are equal to:

The increased spread between three-month LIBOR and three-month bond yields led to ________. This is a classic example of ________.

When the Fed began to raise the federal funds rate in 2004:

When a bank experiences a bank run, it may have to:

The goal of securitization is to:

When depositors rush to get their deposits out of a single bank, it is called a bank panic.

Refer to the following table when answering Table 10.2: Hypothetical Bank Sheet ($ millions) Column A Column B Loans \ 6,800 Deposits \ 7,500 Investments 3,700 Short Term Debt 300 Cash \& Reserves 1,100 long Term Debt 1,800 -Given the information in Table 10.2, the bank's assets are equal to ________ and liabilities are ________.

Which of the following countries did the financial crisis affect?

The following table shows real GDP and potential real GDP for the years 2000-2012. Refer to this table when answering Table 10.1 ($ billions) (Source: Federal Reserve Economic Data, St. Louis Federal Reserve) Potential GDP Real GDP 2000 10,909.7 11,216.4 2001 11,304.5 11,337.5 2002 11,674.3 11,543.1 2003 12,003.6 11,836.4 2004 12,290.0 12,246.9 2005 12,569.2 12,623.0 2006 12,864.6 12,958.5 2007 13,177.7 13,206.4 2008 13,485.0 13,161.9 2009 13,745.4 12,758.0 2010 13,950.3 13,063.0 2011 14,166.6 13,299.1 2012 14,411.0 13,593.2 -According to the data in Table 10.1, when was the recession deepest?

The "flight to safety" in the fall of 2007 led investors to ________, which led to ________.

The acronym "TARP" stands for:

What incentive did banks have to give large loans to households with relatively little income?

Figure 10.3: (Source: Federal Reserve Economic Data, St. Louis Federal Reserve) -Consider Figure 10.3 which shows two types of inflation. Which of the series is likely to be "standard" inflation? Which is core inflation? What is the cause of the sharp increases and decreases in the solid line in the late 2000s?

Between the middle of 2006 and the first quarter of 2012, the national index for the U.S. housing market:

A significant cause of the 2008 financial crisis was that financial institutions were:

In the recent financial crisis, the banks' problems arose from:

The savings glut in the early and mid-2000s led to an increase in U.S. interest rates, which spurred a stock market bubble.

Part of the rapid increase in oil prices was due to:

Bank leverage is equal to a bank's assets minus its liabilities.

Recent IMF studies project negative growth in: