A Vicious Cycle of Deleveraging Occurs When

question 136

Multiple Choice

A vicious cycle of deleveraging occurs when:

• A)asset sales to cover losses produce negative balance sheet effects and force creditors to call in loans, forcing more sales of assets at decreasing prices.
• B)bank regulators take over a bank.
• C)deposit insurance is paid out.
• D)top executives at failing companies are forced to return bonuses.

---

Definitions:

Tribal Society

A form of society structured around family ties, with social organization typically based on clans or tribes.

Division of Labor

The separation of a work process into a number of tasks, with each task performed by a separate person or group, leading to increased efficiency.

Services

Economic activities that produce intangible goods or benefits, such as healthcare, education, banking, and entertainment, as opposed to tangible physical products.

The Wheel

A revolutionary invention enabling easier transportation and movement of goods, significantly impacting human civilization.