The Financial System Is Inherently More Unstable Than Most Other

question 4

Multiple Choice

The financial system is inherently more unstable than most other industries due to the fact that:

• A) while in most other industries customers disappear at a faster rate, in banking they disappear slowly so the damage is done before the real problem is identified.
• B) banks deal in paper profits, not in real profits.
• C) a single firm failing in banking can bring down the entire system; this isn't true in most other industries.
• D) there is less competition than in other industries.

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Definitions:

Income

Income is the money received, especially on a regular basis, for work or through investments.

Classified As Poor

A designation for individuals or households whose income falls below the poverty line, making it difficult to meet basic life needs.

Money Income

The total amount of money earned or received by a person or household before taxes and deductions, from all sources.

In-Kind Transfer

A form of payment made in goods, services, or other non-monetary form instead of cash.