When equity and property prices collapse (bust), bank balance sheets are impaired because:
A. the collateral that is backing many of the loans banks have made is now worth less.
B. banks hold a lot of corporate stocks and they also own a lot of property outright.
C. banks hold a lot of corporate stocks.
D. banks own a lot of property outright.
Answer: A
You might also like to view...
When a person does NOT have to pay the full costs for using a scarce resource, then there is
A. an opportunity cost in the activity for the person but not for society. B. a negative externality. C. a positive externality. D. an underproduction of a good.
By raising the discount rate, the Federal Reserve ________ banks from borrowing more reserves
A) short-changes B) prohibits C) discourages D) encourages
The greater the amount of time that passes after a price change, the
A) less elastic supply becomes. B) more elastic supply becomes. C) more negative supply becomes. D) steeper the supply curve becomes. E) None of the above answers is correct.
A perfectly competitive firm's short-run supply curve is its marginal cost curve below its average variable cost curve
a. True b. False Indicate whether the statement is true or false