Question

In the period since the financial crisis of 2007-2009, inflation has been low in many countries,...

In the period since the financial crisis of 2007-2009, inflation has been low in many countries, while a few experienced outright deflation. Why might unexpected deflation be of particular concern to someone managing a bank?

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
What policy tool has the Federal Reserve Bank been given since the financial crisis?
What policy tool has the Federal Reserve Bank been given since the financial crisis?
The GCC countries’ economies had been growing steadily over the past few years since the financial...
The GCC countries’ economies had been growing steadily over the past few years since the financial crisis of 2008 and their economies grew at 3.16% in 2016. How long will take to double their economic growth? (2 Point) Explain what factors might influence UAE’s future rate of economic growth. (3 Point)
*The very low interest rates following the financial crisis of​ 2007-2009 resulted​ in: A. further declines...
*The very low interest rates following the financial crisis of​ 2007-2009 resulted​ in: A. further declines in checking accounts that began in early 1970s. B. many people moving their funds from CDs and money marketaccounts to checking accounts in order to have more liquidity without sacrificing much interest. C. people switching their funds from checking deposits to CDs in the pursuit​ of higher interest rates. D. funds being transferred from checking accounts to time deposits. *Finance companies A. raise funds...
The US subprime mortgage crisis of 2007-2008 started in early 2007. It later caused a widespread...
The US subprime mortgage crisis of 2007-2008 started in early 2007. It later caused a widespread financial crisis in the US and even in many developed countries around the world. These crises were so severe that they in turn caused a slowdown of the economic activity in the US and, actually, in most of the world. In particular, the Great Recession of the US took place (officially) between December 2007 and June 2009. Some central bankers have argued that the...
1.) During the financial crisis of 2007-2009, A. yields on all types of securities fell. B....
1.) During the financial crisis of 2007-2009, A. yields on all types of securities fell. B. yields on all types of securities rose. C. yields on Treasury securities fell while yields on corporate securities rose. D. yields on Treasury rose while yields on corporate securities fell. 2.) SELECT ALL the true statements about the Federal Funds rate (FFR). A. The FFR is a market determined interest rate. B. The FFR is explicitly set be the Federal Reserve. C. The FFR...
China Moves to Tighten the Money Supply By DAVID BARBOZA – January 6, 2007 China’s central...
China Moves to Tighten the Money Supply By DAVID BARBOZA – January 6, 2007 China’s central bank said late Friday that it had raised the reserve requirement ratio for banks, the fourth increase in six months, to further tighten the nation’s money supply. The modest move, which takes effect this month, increases the reserve ratio by half a percentage point, to 9.5 percent. Analysts said it was the government’s latest warning that too much money in the financial system could...
Argentina and Ecuador: Understanding the Currency Crisis While fiscal policy is never far from the mind...
Argentina and Ecuador: Understanding the Currency Crisis While fiscal policy is never far from the mind of your average Argentine, who remembers the tough times and hyperinflation of the 1980s, the events of 2001 and 2002 have brought fiscal policy back to the forefront of public concern. Though the early 1990s may have been characterized by financial optimism, Argentina has been in a recession since Brazil's 1998 monetary crisis sent shockwaves across the regional and global markets. In early 2002,...
1.) Small banks A. act more competitively than large banks. B. usually charge more on loans...
1.) Small banks A. act more competitively than large banks. B. usually charge more on loans relative to what is paid to depositors compared to large banks. C. are generally more efficient than large banks. D. are growing in number. 2.) Which of the following best describes the current banking system in the United States? A. The market is dominated by 10 large banks and there are very few small banks operating any more. B. There are more than 10,000...
A firm has been experiencing low profitability in recent years. Perform an analysis of the firm's...
A firm has been experiencing low profitability in recent years. Perform an analysis of the firm's financial position using the DuPont equation. The firm has no lease payments but has a $3 million sinking fund payment on its debt. The most recent industry average ratios and the firm's financial statements are as follows: Industry Average Ratios Current ratio 3.21x Fixed assets turnover 5.38x Debt-to-capital ratio 19.99% Total assets turnover 2.87x Times interest earned 2.92x Profit margin 2.07% EBITDA coverage 4.03x...
Instruction: Suppose that, as a financial analyst, you are tasked with evaluating Blades, a U.S. manufacturer...
Instruction: Suppose that, as a financial analyst, you are tasked with evaluating Blades, a U.S. manufacturer of roller blades. In the assignment, you provide the chief financial officer (CFO) of Blades a better understanding of the process of government intervention and its impact on Blades’ international business. The company generates most of its revenue and incurs most of its expenses in the United States. However, it has recently begun exporting roller blades to Thailand. You will provide a report that...