The Failure of a Major Financial Company Is Often a Trigger

question 28

Multiple Choice

The failure of a major financial company is often a trigger for a financial crisis.The main reason for trouble at a single firm to become a crisis for the entire economy is that ________.

• A)the central bank will suspend operations until the failed firm is restructured
• B)it is unclear whether the firm's collapse will remain an isolated event
• C)customers of the failed company will organize a boycott to protest their losses
• D)employees and owners of the failed company reduce their spending,with adverse effects on other businesses

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Definitions:

Tariff

A tax imposed by a government on imported goods, often used to protect domestic industries and regulate trade balances.

Legal Limit

The maximum or minimum boundary set by law, such as for speed on roads, alcohol consumption, or transaction amounts.

Foreign-Produced Shoes

Shoes that are manufactured outside of one's home country.

Tariff

A tax imposed on imported goods, usually to protect domestic industries or to generate revenue.