Which of the Following Is One Unintended Consequence of the Federal

question 103

Multiple Choice

Which of the following is one unintended consequence of the federal bailouts in response to the 2008 financial crisis?

• A)Bondholders will charge equity holders for the risk of this abuse.
• B)Equity holders will credibly commit not to take excessive risk by agreeing to very strong bond covenants.
• C)Lenders to corporations considered "too big to fail" may presume they have an implicit government guarantee,thus lowering their incentives to insist on strong covenants.
• D)Managers who earned large bonuses when their businesses did well did not need to repay those bonuses later when things turned sour.

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Definitions:

Disrupts Consumers

Strategies or products that significantly alter consumer habits, expectations, or experiences in a market.

Continuous Innovation

The ongoing development and implementation of new ideas, products, or processes, aiming to sustain and enhance competitive advantage.

Reminder Advertising

Advertising designed to keep the brand name in front of consumers or to remind them to purchase the product again.

Personal Selling

A marketing strategy where sales representatives directly interact with customers to provide information and sell products or services.