The Dominant Feature of the US Economic Model Prior to the 2008

question 1

Multiple Choice

The dominant feature of the US economic model prior to the 2008 financial crisis was an inherently unstable combination of ________ and ________.

• A)excessively low savings; excessively high borrowing
• B)extreme financial deregulation; high government subsidies
• C)extreme financial regulation; excessively high borrowing
• D)excessively high borrowing; a housing market bubble

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Definitions:

Production Costs

Expenses directly associated with the manufacturing of goods or the provision of services, such as raw materials and labor.

Unrealised Profit

Profit that has been generated on paper due to accounting entries but has not been realized through cash or other assets.

Retained Earnings

The portion of net earnings not paid out as dividends but retained by the company to be reinvested in its core business or to pay debt.

Cost Of Goods Sold

The total cost involved in manufacturing or acquiring the products that a company has sold during a specific period.