29 . The McFadden Act

Multiple Choice

• A. put a tax on the issuance of bank notes by state banks.
• B. separated commercial banking from investment banking.
• C. prohibited national banks from operating branches outside their home states.
• D.A & C

30 . Which of the following statements is true?

Multiple Choice

• FSOC (Financial Stability Oversight Council) was created by the Glass -Steagal Act
• FSOC is in charge of giving charters to National Banks
• FSOC can declare a financial institution to be a systemically important financial institution
• FSOC is in charge of open market operations

31 .

Today (2020) regulators maintain the separation between banks and investment banks through the

Multiple Choice

• Glass-Steagall Act.
• Bank Holding Company Act.
• McFadden Act
• There is no separation between investment banks and commercial banks

32 . In its role as a lender of last resort, the Fed should lend to banks that are

Multiple Choice

• solvent and illiquid
• solvent and liquid
• insolvent and illiquid
• insolvent and liquid.

34 . Under the purchase-and-assumption method of handling a bank failure, the FDIC

Multiple Choice

• takes over the bank and runs it.
• closes the bank, sells off the assets and pays off insured depositors
• keeps the bank open and lends funds to it so that it survives.
• finds a buyer for the bank

36 . When a central bank acts as a lender of last resort,

Multiple Choice

• A.itworsensthe moral hazard problem
• B. it is trying to prevent a financial crisis from developing
• C. it lessens the moral hazard problem
• D.A & B