Because of Asymmetric Information,the Failure of One Bank Can Lead

question 78

Multiple Choice

Because of asymmetric information,the failure of one bank can lead to runs on other banks. This is the

• A)too-big-to-fail effect.
• B)moral hazard problem.
• C)adverse selection problem.
• D)contagion effect.

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Definitions:

Klüver-Bucy Syndrome

A rare cerebral neurological disorder characterized by inappropriate sexual behavior, putting objects in the mouth, and a tendency to explore everything visually.

Inappropriate Sexual Activity

Sexual behavior that is deemed unacceptable or deviant by societal norms and laws.

Lesions

Damaged tissues or organs often identified by their abnormal structure or function, can result from injury or disease.

James-Lange Theory

A theory of emotion asserting that emotions are the result of physiological reactions to events.