When Financial Institutions Go on a Lending Spree and Expand

question 11

Multiple Choice

When financial institutions go on a lending spree and expand their lending at a rapid pace they are participating in a

• A)credit boom.
• B)credit bust.
• C)deleveraging.
• D)market race.

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Definitions:

Output

The quantity of goods or services produced within a given timeframe by a firm, industry, or country.

Economy

The large set of inter-related production, consumption, and exchange activities that aid in determining how scarce resources are allocated.

Short-run Equilibrium

A state in which supply and demand are balanced, prices are stable, and there's no tendency for change in the short term.

Aggregate Supply

The comprehensive stock of goods and services intended for sale by firms within an economy throughout a certain duration.