During a financial crisis the possibility of bank failures rose. An increase in the likelihood of a bank failing shifts demand for its stock
A. right, so the price rises.
B. left, so the price rises.
C. right, so the price falls.
D. left, so the price falls.
Ans: D. left, so the price falls.
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Employees at Bank of America are good at providing banking services and workers at Ben & Jerry's are good at making ice cream
If some bankers are moved to making ice cream, we get a small increase in the amount of ice cream produced and a large decrease in the amount of banking services provided. If the PPF has banking services on the vertical axis and ice cream on the horizontal axis, the effect of the change reflects A) decreasing opportunity costs. B) a bowed out PPF for banking services and ice cream. C) production efficiency. D) a shift to a flatter PPF.
Pat used to work as an aerobics instructor at the local gym earning $35,000 a year. Pat quit that job and started working as a personal trainer. Pat makes $50,000 in total annual revenue. Pat's only out-of-pocket costs are $12,000 per year for rent and utilities, $1,000 per year for advertising and $3,000 per year for equipment.For Pat to earn normal profit, Pat's accounting profit would have to be ________.
A. $50,000 B. $0 C. $15,000 D. $35,000
Banks try to keep their level of excess reserves low because
A. the Fed charges a penalty for holdings of excess reserves. B. they are concerned that the money multiplier will become too large. C. they wish to maximize profits. D. bank regulators levy fines on the amount of excess reserves.
The Fed seeks to promote stability of financial markets because
A) they want to lift the self-esteem of workers. B) Congress directed them to do so by the Employment Act of 1946. C) lower output occurs over time when there is not an efficient matching of savers and borrowers. D) unstable markets result in increased efficiency.