Financial crises are the predictable result of what?

	A.	consumer panic
	B.	overvalued assets
	C.	large number of customers withdrawing funds from a bank
	D.	bad incentives

In times of crisis we need...

	A.	extraordinary theories
	B.	complex theories
	C.	extraordinary and complex theories
	D.	basic economic principles

Securities become more difficult to market during a crisis because of liquidity problems.

True

False

The least bad response to a financial crisis is...

	A.	a true monetary rule that prescribes the Richmond prescriptions
	B.	discretionary monetary policy that follows rule like prescriptions during ordinary times but improves responses during extraordinary responses
	C.	discretionary monetary policy akin to the 2008 response
	D.	a pseudo monetary rule that prescribes the Richmond prescriptions

Supply of emergency credit is necessary to preserve the transmission of information in financial markets.

True

False

The market acts as a filter that rewards firms that make profits and punishes those that do not.

True

False

What is macroprudential policy approach to financial regulation?

	A.	A focus on the real GDP side of credit markets
	B.	A focus on the credit side of financial markets
	C.	A focus on specific financial institutions
	D.	A focus on the properties of a financial system as a whole

How did Bagehot recommend combating the potential abuse of lender of last resort?

	A.	improve the liquidity position of the banking system and raise confidence in financial markets
	B.	emergency liquidity assistance to financial institutions
	C.	preventing systemwide runs on banks
	D.	lending at penalty interest

There are only microeconomics explanations and solutions.

True

False

Because there may be such a thing as an extraordinary financial crisis there may be such a thing as extraordinary explanations for a crisis.

True

False