Chapter 7 GLOBAL ISSUES
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The financial crisis of 2008-2009
A) had a positive impact on economies in Western Europe.
B) affected little more than trade.
C) was partly caused by the costly war on terror and increased globalization.
D) was partly caused by the "Occupy Wall Street" protests.
A) had a positive impact on economies in Western Europe.
B) affected little more than trade.
C) was partly caused by the costly war on terror and increased globalization.
D) was partly caused by the "Occupy Wall Street" protests.
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was partly caused by the costly war on terror and increased globalization.
The financial crisis of 2008-2009
A) had a positive impact on economies in Western Europe.
B) affected little more than trade.
C) was partly caused by the costly war on terror and increased globalization.
D) was partly caused by the "Occupy Wall Street" protests.
A) had a positive impact on economies in Western Europe.
B) affected little more than trade.
C) was partly caused by the costly war on terror and increased globalization.
D) was partly caused by the "Occupy Wall Street" protests.
Economic globalization
Which of the following were precursors to the 2008-2009 financial crisis?
A) Excessive financial pessimism
B) Economic globalization
C) American isolationism
D) Dramatic reduction in U.S. government debt
A) Excessive financial pessimism
B) Economic globalization
C) American isolationism
D) Dramatic reduction in U.S. government debt
Alan Greenspan.
Prior to the financial crisis, the chairman of the U.S. Federal Reserve, who kept interest rates low to increase the availability of money, was
A) Simon Johnson.
B) Henry Paulson.
C) Freddie Mac.
D) Alan Greenspan.
A) Simon Johnson.
B) Henry Paulson.
C) Freddie Mac.
D) Alan Greenspan.
decreased regulatory enforcement of the banking industry.
In the lead-up to the 2008-2009 crisis, the Securities and Exchange Commission
A) tightened its regulation of investment banking.
B) restricted the movement of capital across borders.
C) decreased regulatory enforcement of the banking industry.
D) updated regulations to keep up with financial innovations.
A) tightened its regulation of investment banking.
B) restricted the movement of capital across borders.
C) decreased regulatory enforcement of the banking industry.
D) updated regulations to keep up with financial innovations.
adjustable-rate mortgages.
Subprime loans that helped cause the financial crisis included
A) adjustable-rate mortgages.
B) sovereign wealth funds.
C) hedge funds.
D) A and B
A) adjustable-rate mortgages.
B) sovereign wealth funds.
C) hedge funds.
D) A and B
its Reserve Bank had taken a conservative approach and rejected many financial innovations.
India largely avoided the global financial crisis because
A) its Reserve Bank had taken a conservative approach and rejected many financial innovations.
B) the country was protected by its geographic distance from the United States.
C) real estate development is unknown in India.
D) of the country's close relationship with Japan.
A) its Reserve Bank had taken a conservative approach and rejected many financial innovations.
B) the country was protected by its geographic distance from the United States.
C) real estate development is unknown in India.
D) of the country's close relationship with Japan.
poured billions of dollars into credit markets and banks to restore confidence.
In response to the financial crisis, the United States
A) renewed its commitment to financial liberalization.
B) poured billions of dollars into credit markets and banks to restore confidence.
C) clearly stated that there was no similarity to the Great Depression of the 1930s.
D) failed to reach consensus between Republicans and Democrats about how to proceed.
A) renewed its commitment to financial liberalization.
B) poured billions of dollars into credit markets and banks to restore confidence.
C) clearly stated that there was no similarity to the Great Depression of the 1930s.
D) failed to reach consensus between Republicans and Democrats about how to proceed.
to take measures to strengthen its power vis-à-vis the United States.
China's response to the financial crisis was
A) to seek loans from the United States.
B) to take measures to strengthen its power vis-à-vis the United States.
C) to ratchet down its manufacturing activity.
D) to resist pressure to create a stimulus package.
A) to seek loans from the United States.
B) to take measures to strengthen its power vis-à-vis the United States.
C) to ratchet down its manufacturing activity.
D) to resist pressure to create a stimulus package.
domestic regulatory reforms would be more effective than global regulations.
Efforts to establish global banking regulations through the Basel accords demonstrate
A) domestic regulatory reforms would be more effective than global regulations.
B) the United States is fully supportive of global banking regulations.
C) global banking regulations are highly effective.
D) B and C
A) domestic regulatory reforms would be more effective than global regulations.
B) the United States is fully supportive of global banking regulations.
C) global banking regulations are highly effective.
D) B and C
has played a pivotal role in creating the crisis and in its aftermath.
The amount of money earned by some American executives
A) was in no way a cause of the financial crisis.
B) was regulated by the government before the financial crisis.
C) has played a pivotal role in creating the crisis and in its aftermath.
D) A and B
A) was in no way a cause of the financial crisis.
B) was regulated by the government before the financial crisis.
C) has played a pivotal role in creating the crisis and in its aftermath.
D) A and B
were U.S. government corporations that made more money available to lenders and borrowers preceding the crisis by selling loans to investors.
Fannie Mae and Freddie Mac
A) were a fictitious American couple used by the media as an example of overspending.
B) were U.S. government corporations that made more money available to lenders and borrowers preceding the crisis by selling loans to investors.
C) were agencies that warned the public about the dangers of subprime loans before the crisis.
D) were corporations that requested loans from the European Union to stabilize Ireland's failing economy.
A) were a fictitious American couple used by the media as an example of overspending.
B) were U.S. government corporations that made more money available to lenders and borrowers preceding the crisis by selling loans to investors.
C) were agencies that warned the public about the dangers of subprime loans before the crisis.
D) were corporations that requested loans from the European Union to stabilize Ireland's failing economy.
an unregulated financial innovation that helped create the financial crisis by transferring credit risks away from banks.
Credit default swaps were
A) an unregulated financial innovation that helped create the financial crisis by transferring credit risks away from banks.
B) low-interest credit cards created by the U.S. Federal Reserve Bank.
C) a part of the war against terrorism.
D) a form of real estate "flipping."
A) an unregulated financial innovation that helped create the financial crisis by transferring credit risks away from banks.
B) low-interest credit cards created by the U.S. Federal Reserve Bank.
C) a part of the war against terrorism.
D) a form of real estate "flipping."
spread quickly and were associated with many facets of America's financial decline.
American real estate foreclosures in the financial crisis
A) were rarely seen due to quick action by the U.S. government.
B) spread quickly and were associated with many facets of America's financial decline.
C) helped increase real estate values.
D) had little effect.
A) were rarely seen due to quick action by the U.S. government.
B) spread quickly and were associated with many facets of America's financial decline.
C) helped increase real estate values.
D) had little effect.
their governments had created numerous safety nets, including national health insurance and generous pensions.
Europeans in general took a less frantic approach to the 2008-2009 financial crisis than Americans because
A) their governments had created numerous safety nets, including national health insurance and generous pensions.
B) home ownership is rare in Europe.
C) Europeans have a very low rate of saving.
D) They are not part of the global financial community.
A) their governments had created numerous safety nets, including national health insurance and generous pensions.
B) home ownership is rare in Europe.
C) Europeans have a very low rate of saving.
D) They are not part of the global financial community.
a global power shift, in which some countries emerged stronger than the United States, Western Europe, and Japan.
Globally, a major impact of the 2008-2009 financial crisis is
A) a global power shift, in which some countries emerged stronger than the United States, Western Europe, and Japan.
B) the creation of a European Union.
C) a new nuclear disarmament treaty.
D) the Glass-Steagall Treaty.
A) a global power shift, in which some countries emerged stronger than the United States, Western Europe, and Japan.
B) the creation of a European Union.
C) a new nuclear disarmament treaty.
D) the Glass-Steagall Treaty.