Systemic Risk Exists Because

question 2

Multiple Choice

Systemic risk exists because

• A)there is no government regulation of financial markets.
• B)financial institutions invest in similar securities and therefore are similarly exposed to large declines in prices of those securities.
• C)financial institutions borrow using long-term debt securities but lend their funds for short-term periods.
• D)financial institutions invest heavily in Treasury securities and therefore are exposed to the possibility that the government will default on its debts.

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Definitions:

Robert M. La Follette

An American Republican and later a Progressive politician, U.S. Senator, and a co-founder of the Progressive Party, known for his advocacy of direct democracy, labor rights, and educational reforms.

Walter Lippmann

An influential American writer, reporter, and political commentator known for his works on media and public opinion.

Progressive Government

Refers to a governing body or period that aims for progressive reforms addressing issues like inequality, corruption, and the inefficiencies within the public sector.