Like insolvencies in general, _ can spread from one financial institution to another, and these spillovers largely .
A)asset crashes; are pure fiction
B)liquidity crises; are psychological
C)credit crunches; have no real effects
D)housing bubbles; are short lived

Question

Quizplus · Accepted Answer

Liquidity crises can spread from one financial institution to another and can lead to a loss of confidence in the market, causing panic selling and further exacerbating the situation. These spillover effects are largely psychological, as they are based on market perceptions rather than actual changes in the underlying assets or financial institutions.

Like Insolvencies in General, _ Can Spread from One Financial