Week 3 P2 Explore

What events characterized the financial panic in the United States in 1907?

• The stock market crashed.

• People stormed the banks.

• JP Morgan facilitated loans to banks.

• All of the above.

What is the primary function of the financial system?

• To regulate government spending.

• To act as a broker between those who need capital and those who have it.

• To manage international trade agreements.

• To provide direct employment for all citizens.

Which groups typically require capital for their various activities?

• Households for purchases.

• Companies for recruitment and technology development.

• Governments for building infrastructure.

• All of the above.

What is the fundamental difference between a company selling shares and selling bonds?

• Selling shares is lending money, while selling bonds grants ownership.

• Selling shares raises capital by giving investors ownership, while selling bonds is borrowing money where investors act as lenders.

• Shares are only sold to individuals, while bonds are only sold to other companies.

• Shares offer fixed interest payments, while bonds offer variable dividends.

What was the outcome when the financial system experienced a crisis, as described in the video?

• It led to increased trust in financial institutions.

• It resulted in catastrophic consequences and a loss of trust.

• It caused a significant increase in available money for lending.

• It had no significant impact on the global economy.