Which of the following was the main reason for increased counterparty risk in the shadow banking system prior to the financial crisis of 2007-2009?
A) increased leverage
B) government insuring money market deposits
C) many firms borrowing long term for short-term investments
D) trading of derivatives on exchanges
A
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In 2005, fewer than one million workers were involuntarily employed on a part-time basis
Indicate whether the statement is true or false
Just before class, Jim tells Stuart, "Stuart, you shouldn't skip class today because you have paid tuition to enroll in the class." Stuart ignores Jim's advice, and instead makes the decision of whether to attend based on the importance to his grade that he feels he'd be missing that day in class relative to his value of the extra time he could have to finish the video game he is playing. To an
economist, Stuart is: a. using marginal analysis. b. ignoring the total value of attending class. c. ignoring the concept of opportunity cost. d. irresponsible.
Foreign exchange market intervention is most effective when:
a. each country's political leaders agree to cooperate fully with the process. b. leading economists in each country believe that intervention is needed. c. permanent differences between the free market exchange rate and the fixed exchange rate are expected. d. temporary differences between the free market exchange rate and the fixed exchange rate are expected. e. all the countries restrict the international movement of goods and services.
If real GDP stays the same but the price level increases:
A. nominal money demand should increase. B. real money demand should decrease. C. nominal money demand should remain the same. D. nominal money demand should decrease.