Multiple Choice
Which of the following is an explanation of banking crises?
A) Many banks make the same mistake: investing in an asset bubble.
B) Banks engage in maturity transformation.
C) The Federal Reserve, acting as a lender of last resort, introduces too much competition into the system.
D) Banks are paying low interest rates on deposits and charging high interest rates on loans.
Correct Answer:
Verified
Correct Answer:
Verified
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