Exam 15: Financial Crises and the Economy

The worst weekly decline in U.S. stock market history occurred during the week beginning with ________.

Which of the following best illustrates the problem of moral hazard?

In the period from 1929 through 1933, there were successive ________ in aggregate demand and ________ in short-run aggregate supply.

Which of the following is a distinctive feature of a credit-driven asset-price bubble?

Which of the following is among the possible reasons that the 2007-2009 financial crisis did not result in an economic depression?

Subprime borrowers ________.

When banks fail during a financial crisis, ________.

Financial institutions that cut back on their lending are engaged in ________.

The practice of approving mortgages in order to sell them as mortgage-backed securities is known as ________.

The Great Depression ________.

In the Great Depression, investment spending fell by ________.

A haircut (in finance) is ________.

An asset-price bubble entails ________.

The zero-lower-bound problem eliminates the ability of the central bank to use which of the following in implementing policy?

The rate targeted by the Federal Reserve System as it conducts monetary policy is the ________.

How is a financial crisis like a power blackout?

The Troubled Asset Relief Program ________.

The risk that a borrower has more information about their previous behavior that a potential lender is known as the ________.

Compared to the central bank response to the financial crisis in 2007-2009, the response to the Great Depression of the 1930s may be characterized as ________, while the response of Japan's central bank to the banking crisis in the early 1990s merits the label ________.

Asset-price bubbles ________.