Rumors of a bank failing, even if not true, can become a self-fulfilling prophecy because:
A. depositors will rush to the bank to withdraw their deposits and the bank under normal situations would not have sufficient liquid assets on hand.
B. regulators will scrutinize the bank heavily looking for something wrong.
C. customers will not want to obtain loans from this bank.
D. equity investors will not be able to sell the bank's stock.
Answer: A
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Refer to the figure. Which of the long-run aggregate-supply curves is consistent with long-run equilibrium?
a. both LRAS2 and LRAS3 b. LRAS3 c. LRAS1 d. LRAS2
Figure 4-25
Refer to . Consumer surplus before the tax was levied is represented by area
a.
A.
b.
A + B + C.
c.
D + E + F.
d.
F.
A tax on sellers:
A. shifts the demand curve vertically downwards by the amount of the tax, but does not affect the supply curve B. causes equilibrium price and quantity to decrease. C. causes a shortage in the market. D. shifts the supply curve vertically upwards by the amount of the tax, but does not affect the demand curve.
A purely competitive firm does not try to sell more of its product by lowering its price below the market price because:
A. its demand curve is inelastic, so total revenue will decline. B. this would be considered unethical price chiseling. C. its competitors would not permit it. D. it can sell all it wants to at the market price.