Author Question: The collapse of one bank might lead easily to the failure of several others, because ________. A) ... (Read 49 times)

penza · **on:** Jun 30, 2018

The collapse of one bank might lead easily to the failure of several others, because ________.

A) depositors cannot trust each other to keep their money in the bank
B) deposit insurance renders all banks equally fragile
C) no bank can survive when its competitors cease to operate
D) government regulators will step in to punish any bank suspected of poor management

Question 2

Long-run aggregate supply shocks are not a source of business cycle fluctuations in the ________, because ________.

A) traditional Keynesian model; long-run supply shocks are incompatible with adaptive expectations
B) traditional Keynesian model; demand fluctuations are considered of dominant importance
C) real business cycle model; shocks cannot persist in the long run, when prices and wages are flexible
D) new Keynesian model; such shocks are anticipated by forward-looking consumers and firms