A major disruption in financial markets characterized by sharp declines in asset prices andfirm failures is called aA) financial crisis.B) fiscal imbalance.C) free-rider problem.D) "lemons" problem.

What are the causes of a financial crisis?

________ are asymmetric information problems that act as a barrier to efficient allocationof capital.A) Asset pricesB) Credit imbalancesC) Financial frictionsD) Financial derivatives2. When asset prices rise above their fundamental economic values, a(n) ________ occurs.A) asset-price bubbleB) liability warC) decline in lendingD) decrease in moral hazard3. ________ is a process of bundling together smaller loans (like mortgages) into standarddebt securities.A) SecuritizationB) OriginationC) Debt deflation

When asset prices rise above their fundamental economic values, a(n) ________ occurs.A) asset-price bubbleB) liability warC) decline in lendingD) decrease in moral hazard

What the causes of market failures?

________ are asymmetric information problems that act as a barrier to efficient allocationof capital.A) Asset pricesB) Credit imbalancesC) Financial frictionsD) Financial derivatives