A ____________ Refers to a Situation in Which a Loss

question 89

Multiple Choice

A ____________ refers to a situation in which a loss of confidence in the banking system leads to a run on banks,as individuals and companies withdraw their deposits.

• A) banking crisis
• B) currency crisis
• C) federal reserve crisis
• D) monetary crisis
• E) debt crisis

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Definitions:

Lemon Laws

Statutes designed to protect consumers from purchasing defective vehicles that fail to meet quality and performance standards.

Negative Externalities

Unintended and adverse side effects suffered by third parties or the environment as a result of economic activities.

Direct Controls

Government policies that directly constrain activities that generate negative externalities. Examples include maximum emissions limits for factory smokestacks and laws mandating the proper disposal of toxic wastes.

Economic Efficiency

A situation where resources are allocated in a way that maximizes the net benefit to society or achieves the desired output with the least waste.