(Last Word) the Greater the Leverage in the fiNancial System

question 57

Multiple Choice

(Last Word) The greater the leverage in the financial system, all else equal,

• A) the smaller the monetary multiplier.
• B) the smaller the profit and loss margins of financial firms.
• C) the greater the stability of the financial system.
• D) the greater the instability of the financial system.

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Definitions:

Experience-Dependent

Describes neural growth that is stimulated by environmental experiences and may vary from one individual to another.

Synaptogenesis

The generation of synapses or connections between neurons, usually as a result of the growth of axons and dendrites.

Environmental Events

Occurrences in the natural or built environment that can influence the lives of individuals, communities, and ecosystems, such as natural disasters, pollution, and urban development.

Experience-Expectant

Describes neural growth that requires a certain kind of environmental stimulation that is almost certain to occur in the experience of most members of a species. An example is development of the visual system that requires exposure to light in order to occur.