Suppose the people in my town hear a rumor that their local bank is in trouble and all rush to withdraw money from the bank. This is referred to as:
A. a moral hazard problem.
B. leverage.
C. a bank run.
D. a bad precedent problem.
Answer: C
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The state governments in the U.S. spend a large percentage of their funds on ________
A) public welfare B) social security C) national defense D) income security
Explain the three fundamental decisions that firms in perfectly competitive markets mustmake. Explain how these decisions are interrelated
What will be an ideal response?
Public schools in the United States get most of their operating funds from
A) income taxes on corporate profits. B) tariffs collected on imported goods. C) local property taxes. D) government production and subsidies.
In a country without foreign trade and no income taxes, if the government increases autonomous taxes by 1000 and the MPS is 0.1, then the initial or first round change in expenditures by all tax payers will be
A) a reduction equal to 1000. B) an increase equal to 1000. C) a reduction equal to 900. D) an increase equal to 900.