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C) insolvency. D) illiquidity.Answer: A13) A possible sequence for the three stages of a financial crisis in the U.S. might be ________ leads to ________ leads to ________.A) asset price declines; banking crises; unanticipated decline in price level B) unanticipated decline in price level; banking crises; increase in interest rates C) banking crises; increase in interest rates; unanticipated decline in price levelD) banking crises; increase in uncertainty; increase in interest rates Answer: A14) The economy recovers quickly from most recessions, but the increase in adverse selection and moral hazard problems in the credit markets caused by ________ led to the severe economic contraction known as The Great Depression.A) debt deflation B) illiquidityC) an improvement in banks balance sheets D) increases in bond pricesʹAnswer: A15) Typically, the economy recovers fairly quickly from a recession. Why did this not happen in the United States during the Great Depression?