3. (10 points) The following table is taken from Gary Gorton's work on financial panics: Table 2.3 U.S. National Banking Era Panics NBER Business Cycle Dates Peak-Trough September 1902-August 1904 May 1907-June 1908 Panic Date No Panic October 1907 % Change in C/D -4.13 11.45 % Change in Pig Iron Production -8.7 -46.5 Loss per Deposit $ 0.001 0.001 % and # of U.S. National Bank Failures 0.6 (28) 0.3 (20) Referring to columns (2), (3), (4), (5), and (6) of the entry, explain the connection between the following observed phenomena: a. The currency-demand deposit ratio (C/D) rose by 11.45 percent during the May 1907-June 1908 recession, while it fell slightly in the September 1902-August 1904 recession. b. Pig iron production fell by almost half during the May 1907-June 1908 recession, while it also fell, but by much less, in the September 1902-August 1904 recession. c. After the eventual resolution of the 1907 Panic and the reopening of the banking system, the loss per $1 of deposits was one-tenth of a cent ($.001) and only 0.3% (20) banks actually failed In your answer comparing the 1907-1908 recession to the 1902-1904 recession, you should refer to the following: NQA (No Questions Asked) property demand deposits versus currency as a safe asset disruption of means of payment and production illiquid versus insolvent banks