A major disruption in the financial system that impedes the economy's ability to intermediate between those who want to save and those who want to borrow and invest is called a:
A) moral hazard.
B) speculative bubble.
C) financial crisis.
D) stagflation.

Question

Quizplus · Accepted Answer

A financial crisis is a major disruption in the financial system that impedes the economy's ability to intermediate between those who want to save and those who want to borrow and invest. A moral hazard refers to a situation where an individual or institution takes on more risks because they are protected against losses. A speculative bubble is a situation where the prices of assets rise to unsustainable levels driven by speculation. Stagflation is a situation where there is a combination of high inflation and stagnant economic growth.

A Major Disruption in the Financial System That Impedes the Economy's