The Contagion Effect Refers to the Fact That

question 43

Multiple Choice

The contagion effect refers to the fact that

• A)deposit insurance has eliminated the problem of bank failures.
• B)bank runs involve only sound banks.
• C)bank runs involve only insolvent banks.
• D)the failure of one bank can hasten the failure of other banks.

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Definitions:

3M Corporation

A multinational conglomerate corporation known for products like Post-it Notes, Scotch tape, and a wide range of industrial and consumer goods.

Venture Capital

Financing that investors provide to startup companies and small businesses believed to have long-term growth potential.

Start-up Firms

Newly established businesses, often in the early stage of development and research of their products or services.

Retained Earnings

The portion of a company's profits that is held or retained and not paid out as dividends to shareholders, often reinvested in the business.