Systemic Risk Is

question 49

Multiple Choice

Systemic risk is

• A)the risk of a failure of the entire financial system
• B)the risk associated with broad market movements
• C)the risk of a failure of a firm's financial risk management system
• D)the risk of large price movements throughout the financial system
• E)none of the above

---

Definitions:

Inferior Good

is a type of good whose demand decreases when the income of consumers increases, contrary to what is observed with normal goods.

Cross-price Elasticity

A measure of how the demand for one good responds to a change in the price of another good, indicating their substitutability or complementarity.

Complements

Goods or services that are used together, where an increase in demand for one leads to an increase in demand for the other.

Income Elasticity

A measure of how much the demand for a good or service changes in response to a change in consumers’ income.