Which of the following is true?
A)According to Minsky, in an extended recovery, the seeds of an eventual downturn are planted.
B)A long term cycle of boom and bust has never happened in the U.S. economy.
C)As spending units move from hedge to speculative to Ponzi units, their debt-income ratios fall.
D)Minsky's financial instability hypothesis attempts to explain the short-term year to year gyrations in the economy.

Question

Quizplus · Accepted Answer

According to Minsky's financial instability hypothesis, in an extended recovery, the seeds of an eventual downturn are planted as financial institutions and investors become complacent and take on more risk, leading to an accumulation of debt and the potential for a financial crisis.

Which of the Following Is True