Recession Can Cause Widespread Bank Crises for All of the Following

question 31

Multiple Choice

Recession can cause widespread bank crises for all of the following reasons except:

• A)There is less business investment as banks make fewer loans
• B)Borrowers' default rates increase
• C)Bank capital increases
• D)The negative effect on banks' balance sheets

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Definitions:

Tightwads

Individuals who are excessively frugal, often to the point of foregoing necessary or beneficial expenditures out of an aversion to spending money.

Consumer Confidence

A measure of how optimistic or pessimistic consumers are about the overall state of the economy and their personal financial situation.

Exchange Rates

The value of one currency for the purpose of conversion to another, impacting international trade and economics.

Gas Prices

The cost per unit of gasoline, often influenced by factors such as crude oil prices, taxes, supply, and demand.