The moral hazard problem refers to
a. difficulty banks have in satisfying the government's reserve requirement.
b. depositors making a run on the bank, even though the bank is insured.
c. banks taking on more risk in their lending because they know their depositors are insured.
d. banks issuing bank notes that compete with the government's currency.
c
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A new law passed in Bonland requires all bikers to wear helmets while riding. It also states that those who do not wear helmets while riding will be punished. This law is likely to lead to a(n) ________
A) decrease in government expenditure B) increase in government expenditure C) decrease in tax rates D) increase in the overall price level
Starting from a situation where country A which exports good S and imports good T has a larger trade triangle than country B, explain how the process of reciprocal demand leads to international trade equilibrium
What will be an ideal response?
In the balance of payments, any transaction that leads to a receipt by a resident of a country or its government is a(n)
A) asset. B) minus item. C) deficit item. D) surplus item.
A local doughnut shop reduced the price of its doughnuts from $4 per dozen to $3.50 per dozen, and as a result, the daily sales increased from 300 to 400 dozen. This indicates that the price elasticity of demand for the doughnuts was:
A. elastic. B. inelastic. C. unitary elastic. D. indeterminate; more information is needed to determine the price elasticity of demand.