A Financial Crisis Occurs When an Increase in Asymmetric Information

question 5

Multiple Choice

A financial crisis occurs when an increase in asymmetric information from a disruption in the financial system

• A)causes severe adverse selection and moral hazard problems that make financial markets incapable of channeling funds efficiently.
• B)allows for a more efficient use of funds.
• C)increases economic activity.
• D)reduces uncertainty in the economy and increases market efficiency.

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Definitions:

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Resilient Leader

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The ongoing or frequent denial of approval or acceptance.