The Financial Crisis of 2007-2008 Illustrated How Important the Integration

question 41

Multiple Choice

The financial crisis of 2007-2008 illustrated how important the integration of international financial markets could be in contributing to the spread of financial problems from one country to another.What solution is cited to curb the spread of financial problems from one country to another?

• A)Better regulation of financial institutions to ensure prudent risk taking
• B)Lower the fiscal budget
• C)Less international investment
• D)Paying off debts from the Federal Reserve
• E)Mitigate lack of government transparency

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Definitions:

Regression Coefficient

A coefficient in a regression equation that represents the degree of change in the dependent variable for a one-unit change in an independent variable.

Durbin-Watson Statistic

A test statistic used to detect the presence of autocorrelation in the residuals from a regression analysis.

Critical Values

Critical values are specific points on the scale of a statistical distribution that are used to determine the threshold at which the null hypothesis of a test can be rejected.

Positive Autocorrelation

Occurs when a variable's current value is positively related to its past values in a time series.