The Solution to the Recent Financial Crisis Is

question 54

Multiple Choice

The solution to the recent financial crisis is

• A) better financial disclosure and adequate regulatory supervision of credit markets.
• B) higher borrowing costs for riskier firms.
• C) higher interest rates to discourage risky borrowing.
• D) expansionary fiscal policy.
• E) government extending credit to consumers and firms.

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Definitions:

Consolidated Equity

The total amount of owners' or shareholders' equity in a conglomerate, after all inter-company balances and transactions have been eliminated in consolidation.

Financial Statements

Official records that detail the financial activities and condition of a business, organization, or individual, typically including balance sheet, income statement, and statement of cash flows.

Retained Earnings

The portion of a company's profits kept in the business after dividends are paid to shareholders, used for reinvestment or to pay off debt.

Non-controlling Interest

An ownership interest in a corporation where the percentage of shares owned does not give the shareholder the control of the company.