In what way can the stock market affect the overall economy?
A) It's an important source of funds for corporations.
B) It can affect consumer and business sentiment.
C) It is an important factor affecting consumer wealth and thus consumer spending.
D) All of the above
D
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Which of the following pairs of variables are likely to be positively correlated?
A) Income and consumption B) Price and consumption C) Education and unemployment D) Availability of health care and death rate
Although accounts in commercial banks are covered by government insurance, accounts in other financial institutions are not
If the government decides to bail out these other types of financial institutions during times of a financial crisis, it risks increasing the level of ________ in the financial system. A) moral hazard B) liquidity C) asset deflation D) insolvency