Generally, How Did Most Governments Respond to the Financial Crisis

question 40

Multiple Choice

Generally, how did most governments respond to the financial crisis of 2007-2009?

• A)They severely punished banks and financial institutions.
• B)They allowed banks and financial institutions to fail.
• C)They propped up banks and cut other government spending.
• D)They arrested borrowers that took out loans they could not repay.
• E)They raised interest rates to ensure that banks made profits.

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Definitions:

June 1 Dating

A payment term used in trading where the payment is due on or after June 1st.

3/20, Net 30

A payment term indicating that a 3% discount is available if payment is made within 20 days; otherwise, the full amount is due within 30 days.

Minimizing Cash Holdings

A financial strategy focused on reducing the amount of cash a company or individual keeps on hand, often to boost efficiency or investment returns.

Relaxed Working Capital Policies

Financial strategies that involve maintaining higher levels of current assets than necessary or reducing short-term liabilities, aiming for greater flexibility and lower risk of liquidity problems.