The financial system is inherently more unstable than most other industries due to the fact that:
A)While in most other industries customers disappear at a faster rate, in banking they disappear slowly so the damage is done before the real problem is identified
B)Banks deal in paper profits, not in real profits
C)A single firm failing in banking can bring down the entire system; this isn't true in most other industries
D)There is less competition than in other industries

Question

Quizplus · Accepted Answer

The financial system is more interconnected than most other industries, and the failure of one large firm can have a domino effect, leading to the collapse of the entire system. This is not true in most other industries where the failure of a single company is unlikely to bring down the entire system.

The Financial System Is Inherently More Unstable Than Most Other