The Quote "When Banking Stops, Credit Stops, and When Credit

question 61

Multiple Choice

The quote "When banking stops, credit stops, and when credit stops, trade stops, and when trade stops-well, the city of Chicago had only eight days of chlorine on hand for its water supply. . . . The entire modern world is premised on the ability to buy now and pay later" is credited to:

• A) Henry Paulson.
• B) Michael Lewis.
• C) Fed chairman Ben Bernanke.
• D) Frank Partnoy.
• E) the Wall Street Journal.

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Definitions:

Real Exchange Rate

The rate at which two currencies can be exchanged for each other, adjusted for inflation, which represents the true purchasing power.

Inflation Rate

A rise in the cost percentage of goods and services in an economy during a certain period.

Depreciate

The gradual reduction in the economic value of tangible fixed assets due to wear and tear over time.

Euro

The Euro is the official currency of the Eurozone, used by 19 of the 27 European Union countries.