Which of the Following Is FALSE About the Financial Crisis

question 27

Multiple Choice

Which of the following is FALSE about the financial crisis of 2008?

• A)the crisis started in the in the U.S. but had a particularly devastating effect on the economies of Mexico and Canada
• B)as it became increasingly difficult to get loans, the financial crisis quickly spread to the goods and labor markets causing economic activity to decline
• C)in the recession that followed, the unemployment level in the U.S. hit highs not seen since 1983 and reached its peak only after the recession was officially declared over
• D)as financial institutions curtailed their lending activity, even solvent firms experienced severe liquidity problems
• E)none of the above

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Definitions:

Per-unit Costs

The cost incurred for producing a single unit of product, often calculated to analyze efficiency or profitability.

Increasing Cost Industry

An industry where production costs rise as output increases due to factors such as limited resources or higher wages.

Resource Prices

The cost associated with acquiring resources or inputs, such as labor, raw materials, and capital, used in the production of goods and services.

Long-run Market Supply

Refers to the total amount of goods that can be produced and made available in the market over a long period, considering all resources are variable.