Podcast
Play an AI-generated podcast conversation about this lesson
Questions and Answers
What is the typical effect of a financial crisis on a country's financial system?
What is the typical effect of a financial crisis on a country's financial system?
- Increased risk of bank failures and liquidity problems (correct)
- Improved stability and growth in the financial sector
- Enhanced confidence in the banking system
- Decreased need for government intervention in the financial system
How does a financial crisis usually impact the banking system?
How does a financial crisis usually impact the banking system?
- Reduced regulatory oversight
- Expansion of investment opportunities for banks
- Decreased interest rates and increased lending
- Rising non-performing loans and credit constraints (correct)
What is a common consequence of a financial crisis on the stock market?
What is a common consequence of a financial crisis on the stock market?
- Increased investor confidence and higher dividends
- Stable stock prices and reduced trading activity
- Sharp declines in stock prices and market volatility (correct)
- Expansion of stock market indices
In a floating exchange rate system, a currency’s value is allowed to fluctuate compared to all other currencies. What does this mean?
In a floating exchange rate system, a currency’s value is allowed to fluctuate compared to all other currencies. What does this mean?
Signup and view all the answers
What is the primary factor influencing a currency's value in a floating exchange rate system?
What is the primary factor influencing a currency's value in a floating exchange rate system?
Signup and view all the answers
In a floating exchange rate system, how does a country intervene to stabilize its currency's value?
In a floating exchange rate system, how does a country intervene to stabilize its currency's value?
Signup and view all the answers
