Which of the following did not contribute to the U.S. banking collapse of 1929-1933?
a. The Federal Reserve System and other government agencies did not act quickly or decisively enough
b. Deposit insurance did not exist at that time.
c. The banking industry consisted of only a few very large banks.
d. The fact that the economy was in a continuous downward spiral during this period undermined depositors' confidence in the solvency of the banks.
c
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If Britain allows the pound-DM (Deutsche Mark) exchange rate to float, and there is an increase in the foreign interest rate, it:
A) has no effect on home rates. B) will cause a monetary contraction and a higher interest rate in Britain. C) will eventually decrease if trade is affected. D) always shifts out the home IS curve (Britain), all else equal.
The financial crisis occurred in 2008 in large part because of losses on securities consisting of bundles of mortgage loans known as
A) home loan loss reserves. B) credit default swaps. C) mortgage-backed securities. D) naked put options.