From a bank's perspective, the most vulnerable sources of funds are:
a. Short-term deposits
b. Reserve assets.
c. Long-term government securities.
d. Loans to companies with low credit ratings.
e. Long-term savings deposits.
Question 2 - Assume that the central bank increases the reserve requirement. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and net nonreserve-related international borrowing/lending in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period falls, and net nonreserve-related international borrowing/lending becomes more negative (or less positive).
b. The quantity of real loanable funds per time period rises, and net nonreserve-related international borrowing/lending becomes more negative (or less positive).
c. The quantity of real loanable funds per time period falls, and net nonreserve-related international borrowing/lending becomes more positive (or less negative).
d. The quantity of real loanable funds per time period and net nonreserve-related international borrowing/lending remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
Question 3 - Credit risks are based mainly on:
a. The maturity of an issue.
b. The amount of national credit outstanding relative to GDP.
c. The solvency, performance, and liquidity of borrowers.
d. The degree to which market variables, like interest rates and exchange rates, change.
e. None of the above.
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