The government or the federal reserve the financial crisis

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Reference no: EM13909519

1.We learn from Gorton that it is not possible to prove that had Lehman Brothers been bailed out by the government or the Federal Reserve the financial crisis of 2008 would not have occurred. This is an example of not being able to prove the "counterfactual". true or false? why

2. The FDIC has never extended protection to uninsured general creditors because this would create increased moral hazard in the banking system. true or fasle? why ?

3. A possible sequence for the three stages of a financial crisis in the U.S. might be ________ leads to ________ leads to ________.

A. banking crises; increase in interest rates; unanticipated decline in price level

B. banking crises; increase in uncertainty; increase in interest rates

C. unanticipated decline in price level; banking crises; increase in interest rates

D. asset price declines; banking crises; unanticipated decline in price level

Reference no: EM13909519

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