The Bank of Techland is the largest bank in Techland.Which of the following is likely to be true if this bank fails?
A) Techland's output will fall.
B) Real interest rates in Techland will fall.
C) Labor supply in Techland will fall.
D) Real wages in Techland will remain unchanged.

Question

Quizplus · Accepted Answer

If the largest bank in Techland fails, it would likely cause a financial crisis and a decrease in confidence in the economy. This could lead to a decrease in investments, lower levels of consumption, and ultimately a fall in Techland's output.

The Bank of Techland Is the Largest Bank in Techland