When all bank depositors want to withdraw their funds immediately is called a. Bank withdrawal b. Run on banks c. Big Mac attack d. Banking panic Agency theory involves which two parties: a. Principal and mangers b. Principal and agent c. Agent and adviser d. Attorney and agent The spread between the interest rates on bonds with default risk and default-free bonds is called the a. Risk Reward Ratio b. Risk Difference c. Risk Spread d. Risk Premium Conflicts of interest are a type of moral hazard that occurs when a person or institution has multiple interests and serving one interest is detrimental to the other. Examples include which of the following? a. A rating agency acting as both a rater and consultant for a company b. A rating agency acting as both rater and auditor c. Investment banks researching public companies in technology as well as underwriting securities for companies in transportation. d. An auditor acting as both an auditor and tax preparer for a firm The seeds of a financial crisis can begin with a. Mismanagement of financial liberalization b. Mismanagement of financial liberalization, innovation or Elimination of restrictions c. Innovation d. Elimination of restrictions The design of the Federal Reserve System was intended to diffuse power along the following dimensions, except: a. Federal government b. Government and private sector interests c. Needs of bankers, businesses, and the public d. Regions of the U.S. Which of these is not a way a financial crisis can begin a. Increase in uncertainty b. Credit boom c. Credit boom / bust d. Asset-price Doom / bust