Systemic Risk Is Present When

question 105

Multiple Choice

Systemic risk is present when:

• A) a bank or other financial institution acts recklessly,hoping that the Fed and regulators will later bail them out.
• B) the U.S.government defaults on Treasury securities.
• C) the failure of one financial institution will bring down other institutions as well.
• D) the Fed increases the money supply when it should decrease it.

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Definitions:

Mining Firm

A company involved in the extraction of minerals, ores, and other geological materials from the earth.

Renewable Resource

A natural resource that can be replenished at the same rate or faster than it is consumed, such as solar energy, wind, or timber.

Harvesting

The process of gathering mature crops from the fields or collecting the elements of a crop, such as grains, fruits, or vegetables.

Price

Price is the amount of money required to purchase a good or service, set by the interplay of supply and demand in the market.