The GFC

question 79

Multiple Choice

The GFC:

• A)prompted a 'flight to quality' that pushed up the interest rate on government securities
• B)caused a sharp contraction in lending that prevented many firms from being able to refinance their maturing debt
• C)prompted the US government to 'bail-out' financial institutions, including Lehman Brothers
• D)reinforced the view that markets are 'self-correcting'
• E)lead to widespread failures of financial institutions in Australia.

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Definitions:

Long Term Assets

Assets that are expected to provide economic benefits to a company over a period longer than one year, like buildings and machinery.

Condensed Balance Sheets

Simplified financial statements presenting only the most essential information about a company's financial position.

Fixed Assets

Long-term tangible assets used in the operation of a business that are not likely to be converted to cash within one year.

Capital Expenditures

Financial resources dedicated by a corporation towards the acquisition, betterment, and maintenance of real assets, like real estate, industrial plants, or machinery.