According to the Financial Instability Hypothesis, When Government Intervenes to Break

question 23

Multiple Choice

According to the financial instability hypothesis, when government intervenes to break a downturn

• A)The economy returns to a financially stable position.
• B)Spending units do not reduce their leveraging and the economy remains financially fragile.
• C)the knowledge that the government will do so may create banks to take on more risks.
• D)Both b and c are correct.

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