It is easy for one financial institution to reduce its leverage by acting alone, but when many financial institutions try to do the same thing at once, asset prices fall rapidly and bank capital declines for all such institutions
a. True
b. False.
A
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The Lehman Brothers bankruptcy triggered a financial panic that featured a(n)
A. increase in Treasury interest rates and an increase in most other interest rates. B. increase in Treasury interest rates and a decrease in most other interest rates. C. decrease in Treasury interest rates and an increase in most other interest rates. D. decrease in Treasury interest rates and a decrease in most other interest rates.
An inflationary output gap is defined to be when the current level of output is:
A. high enough to cause an unexpected amount of inflation. B. below full employment GDP. C. above full employment GDP. D. equivalent to full employment GDP.
To develop a competitive advantage and increase their firm's profitability, managers need to understand what affects their revenues, costs, and their ability to set prices
Indicate whether the statement is true or false
During a certain year, the nominal interest rate was 7 percent, the real interest rate was 4 percent, and the CPI was 198.3 at the end of the year. The CPI at the beginning of the year was
a. 204.2 b. 192.5 c. 178.6 d. 220.1