Why do banking panics normally lead to recessions?
What will be an ideal response?
Bank failures can directly affect the ability of households and firms to spend by wiping out some of the wealth they hold as deposits. Shareholders of banks also suffer losses to their wealth when banks fail. Households and firms that relied on failed banks for credit will no longer have access to the loans they need to fund some of their spending. Finally, by destroying checking account deposits, bank failures can result in a decline in the money supply.
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What is true about dominant strategies in the game in Scenario 13.11?
A) R1 and C1 are dominant strategies. B) R1 and C2 are dominant strategies. C) R2 and C1 are dominant strategies. D) R2 and C2 are dominant strategies. E) There are no dominant strategies.
Answer the following statement true (T) or false (F)
1) Weak property rights encourage faster extraction than would otherwise maximize the long- term stream of profits. 2) Elephants are moving closer to extinction in places where they are treated as private property. 3) The economic benefits of forests include provision of wildlife habitats, erosion prevention, and oxygen production. 4) In the United States and parts of Western Europe, the amount of land covered by forests is increasing.