Author Question: What are the three ingredients of a financial and banking crisis? What will be an ideal ... (Read 158 times)

vHAUNG6011 · **on:** Jun 29, 2018

What are the three ingredients of a financial and banking crisis?

What will be an ideal response?

Question 2

Refer to Figure 2-15. One segment of the circular flow diagram in the figure shows the flow of wages and salaries from market K to economic agents M. What is market K and who are economic agents M?

A) K = product markets; M = firms B) K = factor markets; M = firms
C) K = product markets; M = households D) K = factor markets; M = households

wshriver · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

A financial and banking crisis occurs when there is a widespread fall in assets prices, a significant currency drain, and a run on banks. When these events occur, banks and other financial institutions face incipient failure and so they drastically decrease their lending activities.

Answer to Question 2

D