An important feature of the financial market crisis was
A) decreased interest rate spread on risky assets versus safe assets.
B) increased investment by firms.
C) an increase in the safe credit market interest rate, r.
D) increased financial market uncertainty.
E) a lower opportunity cost of investment.

Question

Quizplus · Accepted Answer

Increased financial market uncertainty was a key feature of the financial market crisis. This uncertainty led to a lack of trust in financial institutions and markets, leading to decreased investment, increased borrowing costs, and a general downturn in economic activity. The other options listed were not major features of the crisis.

An Important Feature of the Financial Market Crisis Was