Card 44 / 145: Systemic risk is present when
A)
the failure of one financial institution will bring down other institutions as well.
B)
the Fed increases the money supply when it should decrease it.
C)
the U.S. government will default on Treasury securities.
D)
a bank or other financial institution acts recklessly, hoping that the Fed and regulators will later bail them out.
Answer:
A) the failure of one financial institution will bring down other institutions as well.
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