When banks fail during a financial crisis, ________
A) the removal of these weak institutions serves to strengthen the financial system
B) the elimination of competitors is likely to spark a credit boom
C) there is a loss of information that can cause the crisis to worsen
D) surviving banks resort to financial engineering to retain customers
C
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Unlike Germany, Japan has
A) a suppressed corporate debt market. B) laws against banks holding corporate stock. C) a large stock market. D) close ties between a firm and a single bank.
Suppose that Y = 4,000 and we are at a point on the money demand schedule where (M/P) = 600. Should Y fall to 3,900, the same quantity of real money balances
A) will not be demanded under any conditions. B) will be demanded again provided the interest rate does not change. C) will be demanded again provided the interest rate rises by a certain amount. D) will be demanded again provided the interest rate falls by a certain amount.