Describe the role of uncertainty at the beginning of and in the unfolding of a financial crisis
What will be an ideal response?
Regardless of the initial spark, an adverse event within and/or affecting the financial sector becomes a systemic crisis when it gives rise to substantial uncertainty. Because the gathering, analysis, and strategic use of information is a core function of financial institutions, an increase in uncertainty can disrupt the very mechanisms that, under normal circumstances, reduce and manage uncertainty. Thus, the key impacts of an increase in uncertainty are impairment of abilities to deal with uncertainty and further increases in uncertainty. The spiral of rising uncertainty will end only when the loss of value and the paralysis of financial operations is so complete as to inspire confidence that it cannot get worse.
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Is the number of sellers in the market the only thing that is different in each of the four market types economists study?
What will be an ideal response?
Investment is usually
A) more variable than consumption. B) less variable than consumption. C) as variable as consumption. D) It is hard to tell from the data whether investment is more or less variable than consumption. E) a larger component of the GNP than consumption.
PPF is the
A) price parity formula. B) possible production function. C) producer's preferred frontier. D) production possibilities frontier.
When a non-discriminating monopolist is maximizing profit, then
a. its price equals its marginal cost b. its price equals its marginal revenue c. it is producing all units for which marginal revenue exceeds marginal cost d. its supply curve intersects the market demand curve e. its marginal cost curve intersects the market demand curve