Q: List and discuss the various reasons that contributed to the financial crisis that occurred in 2008
A: 4. The 2008 financial crisis can be largely traced to the burst of the housing bubble. The banks…
Q: There is a growing concern among tax payers that ‘too big to fail’ (TBTF) creates moral hazard…
A: Too big to fail (TBTF) is used to safeguard and also protect the big firms (for example the…
Q: Investors typically buy and sell stocks, bonds and other securities in the secondary market.…
A: Securities refers to financial instruments used to raise capital in private and public markets. The…
Q: How did higher returns securities in the secondary mortgage market contribute to the liquidity…
A: The 2008 financial crisis began in earlier years with economical credit and lending of tax standards…
Q: 30) Which of the following can be described as involving indirect finance? A) You make a loan to…
A: Borrowers get cash from the financial market via indirect channels, such as through working with a…
Q: Bernanke argued two problems contributing to the financial crisis included: banks reliance on…
A: BPEA, the academic magazine published twice a year by Brookings' Economic Studies division, has been…
Q: Explain what the effects to the FINANCIAL MARKET happen more and more people keep increasing default…
A: The majority of the people cannot repay their loans to financial institutions. There are cases of…
Q: What is leverage, and why is it so important in understanding the financial crisis?
A: Leverage: The term leverage refers to the practice of investment by taking loans and borrowings. A…
Q: Explain the role that financial intermediaries play in an economy by giving a practical example.
A: In an economy, financial intermediaries play an important role by acting as a bridge between savers…
Q: “Financial intermediaries play a crucial role in an economic crisis–they are responsible for both…
A: A financial intermediary is an entity that acts as the middleman between two parties in an…
Q: Explain one negative impact of the 2007–2009 Global Financial Crisis and ONE approach that was used…
A: 2008 crisis was the great financial crisis in the world where it was started from US and spreaded…
Q: Read the following premise carefully and answer the questions specifically and in detail. You must…
A: 1 Financial markets is one of the provision of the regulated systems and using the companies, in…
Q: Why do credit spreads risesignificantly during a financial crisis?
A: Credit Spread refers to the difference in the yield obtained on financial fixed income instruments…
Q: Which of these is an example of asymmetric information in banking? a. Borrowers and lenders have…
A: Asymmetric information refers to a situation in which one party to a transaction has more…
Q: Explain the role of financial innovation and the role of regulation in the generation of a financial…
A: A financial system consists of legal rules, firms, and markets, with the financial firms including,…
Q: Banks are more likely to play a role in financing requiring: Select one: a. Low credit risk. b. Very…
A: One of the primary function of banks is to provide loans and advances of various forms to it's…
Q: Why was the Term Auction Facility more widely used by financial institutions than the discount…
A: The Term Auction Facility is a program by Fed to increase the amount of liquidity in the U.S.…
Q: Discuss in detail one negative impact of the 2007–2009 Global Financial Crisis and an approach that…
A: Great recession and the causes is complex and involve several forces. The period required to recover…
Q: Describe what this measures and comment on whether you think this is a good indicator of financial…
A: A wide variety of indicators are used by economists and financial analysts to measure the variations…
Q: Briefly describe how the advent of a financial crisis may increase the different categories of…
A: Asset values plummet, firms and individuals are unable to pay their loans, and financial…
Q: When I expect interest rates to fall in the near future, I will be willing to Buy bonds at current…
A: There exist an inverse relationship between interest rates and bond prices. Thus, if an individual…
Q: explain why an increase in financial frictions is a keyelement in financial crises
A: A financial crisis is a situation when the financial assets and instruments like real estate and…
Q: Define the term financial crisis.
A: Financial crisis is the situation where the value of assets falls drastically such as stock market…
Q: he Dodd Frank Act does not address some of the issues related to the financial crisis and recession…
A: Dodd Frank Act came in July 21, 2010 to strengthen the financial system and rules governing it, so…
Q: what do you think are the main reasons that led to the subprime crisis of 2007/ 2008?
A: The 2007-08 financial crisis, known as the subprime mortgage crisis, was a significant outflow of…
Q: Discuss the Basic Puzzle in Financial Structure around the Globe. What is Lemon Problem? How the…
A: The basic puzzle in the financial structure around the Globe is the adverse selection in the…
Q: Give two examples each of revenue eceipts and capital receipts in a financial pudget.
A: According to the given question Financial budget in economics is known as a budget which predicts…
Q: Analysis of how the actions of financial intermediaries can result in an economic crisis e.g., the…
A: One of the primary reason for economic crisis is the lose in consumer confidence. This is because…
Q: Moral hazards and asymmetric information fueled the great recession 2007-2008, which is triggered by…
A: Introduction: Numerous market inefficiencies, unethical practices, and a lack of transparency in the…
Q: Choose the correct answer and give short explaination.
A: Financial liberalisation refers to policies aimed at reducing or eliminating regulatory oversight of…
Q: Discuss the following statements: “(1) individual financial institutions will generally have…
A: Financial institutions are central banks, all the retail banks and insurance agencies. These do have…
Q: Which of the following is TRUE about financial regulations? * A. Financial regulations makes the…
A: Financial Institutions are defined as those companies which deal in financial and monetary…
Q: An efficient financial market means transaction costs. True or False?
A: Transaction costs are the costs associated with purchasing or selling a product or service.
Q: What are the convergence of issues that led to and caused the subprime financial crisis of 2007-2008
A: Financial crisis of 2007-2008, particularly known as mortgage crisis was basically the result of…
Q: Suppose that the Bank of Canada engages in monetary tightening, raising its Overnight Rate Target…
A: Tightening policy occurs when central banks raise the federal funds rate, and easing occurs when…
Q: Explain the events that transpired in the 2008 financial crisis.
A: A recession is a time of financial withdrawal, where organizations see less interest and start to…
Q: Among the following which statement given is not true? a) If the central bank raises its refinancing…
A: Refinancing rate and repo refer to the borrowing activities of assets of the Central Bank from other…
Q: What are one similarity and one difference in government policies between the COVID-19 pandemic and…
A: Similarity among COVID-19 pandemic and the great financial crisis is that there is an economic…
Q: Deliberate specifically how and through which channels the interest rate affects(negatively or…
A: Any fluctuation in interest rates has a ripple effect both positively and negatively throughout the…
Q: The 2016 elections in the United States Multiple Choice led to resistance to Dodd-Frank becoming…
A: In the political election of 2016 of the United States, Donald Trump won the leadership against Dodd…
How a decline in housing prices can trigger the subprime financial crisis in advanced economics? Explain in detail.
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- Why aren't more resources dedicated to ensuring adequate prudential oversight of the financial system, given that it's clear that such monitoring is necessary to forestall financial crises?Why aren't more resources being allocated to sufficient prudential oversight of the financial system in order to rein in excessive risk-taking, when it is evident that such monitoring is necessary to avoid financial crises?how does a general increase in uncertainty as a result of a failure of major financial institution lead to increase in adverse selection and moral hazard problems?
- Define a financial crisis and discuss four of the six categories of factors that could cause a financial crisisWhat are the three economic consequences of an asset price crash and institutional problems during a financial crisis?What are the two basic causes of financial crises inemerging market economies?
- Discuss in detail one negative impact of the 2007–2009 Global Financial Crisis and an approach that was used to minimize that negative impact.Which of the following is TRUE about financial regulations? *A. Financial regulations makes the financial system organized, stable and maintain its integrity.B. Financial regulations are not always required in the financial system because financial institutions are already regulated by designated government agencies.C. Financial who are privately trading inside information are highly acceptable in the financial system.D. Financial regulations are laws that are not necessarily need to be enforced.E. None of the choices.Discuss the following statements: “(1) individual financial institutions will generally have unimportant effects on market prices or the economy as a whole and (2) serving their financial interests always safeguards stability of the financial system” according toa) microprudential b) macroprudential approaches?
