Question 1

In finance, leverage:

Accepted Answer

A)   multiplies the effect of gains and losses in financial markets.
B)   is using borrowed money to pay for investments.
C)   helps explain why a crash is so damaging after a bubble bursts.
D)   All of these statements are true.E) None of the above
F) B) and C)

Question 2

From 1922 to 1929, the total value of the stock market:

Accepted Answer

A)   more than tripled.
B)   decreased by nearly 50 percent.
C)   decreased by nearly 90 percent.
D)   stayed the same.E) B) and D)
F) B) and C)

Question 3

Over the two decades leading up the 2008 crisis, __________ interest rates meant that consumers could take on _____ debt without significantly increasing the amount of debt service they had to pay.

Accepted Answer

A)   falling; more
B)   rising; more
C)   falling; less
D)   rising; lessE) A) and C)
F) C) and D)

Question 4

The combined efforts of the Fed and the Treasury in response to the financial crisis following the housing market crash were:

Accepted Answer

A)   effective in restoring aggregate supply to its pre-crisis level, but still left the economy with sluggish aggregate demand.
B)   ineffective in restoring aggregate supply to its pre-crisis level, and output remained far below potential.
C)   effective in restoring aggregate supply to its pre-crisis level, but left the economy facing severely increasing inflation.
D)   ineffective in restoring aggregate supply to its pre-crisis level, but output increased due to increased consumer confidence boosting aggregate demand.E) B) and C)
F) A) and D)

Question 5

The percent of disposable income that consumers have to pay for their debt is called:

Accepted Answer

A)   a debtor's mark.
B)   debt service.
C)   the cost of debt.
D)   debt accountability.E) A) and B)
F) A) and C)

Exam 17: Financial Crisis

Over the two decades leading up the 2008 crisis, ______ interest rates meant that consumers could take on _ debt without significantly increasing the amount of debt service they had to pay.

Correct Answer
verified

The percent of disposable income that consumers have to pay for their debt is called:

Correct Answer
verified

In finance, leverage:

Correct Answer
verified

From 1922 to 1929, the total value of the stock market:

Correct Answer
verified

The combined efforts of the Fed and the Treasury in response to the financial crisis following the housing market crash were:

Correct Answer
verified

Exam 17: Financial Crisis

Over the two decades leading up the 2008 crisis, __________ interest rates meant that consumers could take on _____ debt without significantly increasing the amount of debt service they had to pay.

Correct AnswerverifiedShow Answer

The percent of disposable income that consumers have to pay for their debt is called:

Correct AnswerverifiedShow Answer

In finance, leverage:

Correct AnswerverifiedShow Answer

From 1922 to 1929, the total value of the stock market:

Correct AnswerverifiedShow Answer

The combined efforts of the Fed and the Treasury in response to the financial crisis following the housing market crash were:

Correct AnswerverifiedShow Answer

Over the two decades leading up the 2008 crisis, ______ interest rates meant that consumers could take on _ debt without significantly increasing the amount of debt service they had to pay.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified