What Theory States That Problems in Financial Markets Can Amplify

question 12

Multiple Choice

What theory states that problems in financial markets can amplify shocks to the real economy and create a feedback loop, which exacerbates economic problems?

• A)Financial causal theory.
• B)Financial simulation theory.
• C)Financial accelerator theory.
• D)All of the above.

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Definitions:

Mechanical Load

The force or stresses applied to a system or component, usually resulting from mechanical devices or systems.

Coupling Device

A mechanical or electromagnetic component used to connect two shafts together at their ends for the purpose of transmitting power.

Standards Agency

An organization that develops, maintains, and promotes technical standards to ensure quality, safety, and efficiency.