Which Sequence of Events Correctly and Sequentially Best Describes Financial

question 1

Multiple Choice

Which sequence of events correctly and sequentially best describes financial sector problems spilling over to the real sector of the economy?

• A)Bank assets increase,capital increases,consumers purchase less,firms lay-off workers.
• B)Bank liabilities increase,capital decreases,consumers purchase more of the "wrong" products,firms lay-off some workers and hire other workers.
• C)Bank assets decline in value,banks approach insolvency,banks cut back on lending,consumers purchase less,some firms produce less and other firms go out of business.
• D)Banks engage in regulatory capital arbitrage,leverage ratios are rising,asset values are rising,consumers purchase less,producers produce less,firms lay-off some workers.
• E)none of the above

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Definitions:

Exit Interviews

Meetings held with departing employees to gain insights into their work experience and reasons for leaving.

Unsatisfied Needs

Refers to the conditions and desires of individuals or organizations that remain unmet or unfulfilled.

Maslow

Refers to Abraham Maslow, an American psychologist known for creating Maslow's hierarchy of needs, a theory in psychology that prioritizes human needs into a hierarchy.