The Financial System Is Inherently More Unstable Than Most Other

question 30

Multiple Choice

The financial system is inherently more unstable than most other industries due to the fact that:

• A)While in most other industries customers disappear at a faster rate, in banking they disappear slowly so the damage is done before the real problem is identified
• B)Banks deal in paper profits, not in real profits
• C)A single firm failing in banking can bring down the entire system; this isn't true in most other industries
• D)There is less competition than in other industries

---

Definitions:

Irreparable Harm

Damage or injury that cannot be adequately remedied by money damages and therefore often justifies a court's granting of injunctive relief.

Materially Breached

Pertaining to a serious violation or failure to perform one’s duties under a contract that justifies the other party's right to terminate the agreement.

Substantially Breached

A significant failure to fulfill one's duties under a contract, which justifies the other party's right to terminate the agreement and seek damages.

Anticipatory Breach

Occurs when one party to an agreement makes it clear, before the performance is due, that they do not intend to fulfill their contractual obligations.