Factors that lead to worsening conditions in financial system include ________.

Question

Quizplus · Accepted Answer

The deterioration in banks' balance sheets can lead to worsening conditions in the financial system. Declining interest rates and increases in bond prices may have both positive and negative effects on the financial system, depending on the context. Unanticipated increases in the price level may also have negative effects, but this is not always the case. Therefore, C is the best choice as it is more directly linked to the worsening conditions in the financial system.

Factors That Lead to Worsening Conditions in Financial System Include