Which of the Following Statements Is True

question 80

Multiple Choice

Which of the following statements is true?

• A) Credit-driven asset bubbles are particularly dangerous. When asset prices fall, the deleveraging of credit markets reduces economic activity.
• B) Bubbles driven soley by irrational exuberance lead to a failure of financial institutions.
• C) Both A and B are correct.
• D) Neither A nor B is correct.

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Definitions:

Power Factor

A measure of how effectively electrical power is converted into useful work output, representing the ratio of real power flowing to the load to the apparent power.

Circuit

An electrical path between two points.

Unity

100%, or 1.

LC Parallel Circuits

Circuits that contain both inductors (L) and capacitors (C) arranged in parallel, affecting the circuit's total impedance and resonance.