In a capitalist market economy, the decision to save is made by the same people who make the major investment decisions

A financial crisis brought on by macroeconomic imbalances

A) is usually inevitable given underlying conditions. B) often happens to countries with strong international positions. C) is often preceded by capital inflows and an increase in foreign liabilities. D) is usually the result of fragility in the banking sector.

Which of the following correctly describes fractional reserve banking?

A. The federal government only insures a fraction of the deposits at most banks. B. Banks keep a fraction of their loans with other banks to maintain the quality of their loan portfolio. C. Banks can loan out all but a small fraction of its own money, but must hold all money deposited at the bank on reserve in bank vaults. D. Banks can loan out all but a fraction of its own money, but must hold all money deposited at the bank on reserve in bank vaults.