The financial system is inherently more unstable than most other industries due to the fact that:
A. a single firm failing in banking can bring down the entire system; this isn't true in most other industries.
B. banks deal in paper profits, not in real profits.
C. while in most other industries customers disappear at a faster rate, in banking they disappear slowly so the damage is done before the real problem is identified.
D. there is less competition than in other industries.
Answer: A
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The market for watermelons in Alabama is perfectly competitive. A watermelon producer making zero economic profit could make an economic profit if the
A) average total cost of selling watermelons does not change. B) average total cost of selling watermelons rises. C) average total cost of selling watermelons falls. D) marginal cost of selling watermelons does not change. E) marginal cost of selling watermelons rises.
Which of the following is true?
i. The supply of a good is inelastic if when its price changes, the percentage change in the quantity supplied exceeds the percentage change in price. ii. Price elasticity of supply equals the percentage change in the quantity supplied divided by the percentage change in price. iii. If demand is price elastic, a rise in price leads to a decrease in total revenue. A) only i B) only ii C) only iii D) i and ii E) ii and iii
When an economy is on the balanced growth path, the growth rate of real GDP per capita is determined by the growth rate of
A) convergence. B) capital accumulation. C) total factor productivity. D) the labor force.
A market achieves allocative efficiency when: a. total surplus is at its maximum
b. consumer surplus is at its minimum. c. demand is perfectly elastic. d. market concentration is maximized.