What agreement has been reached to reduce the moral hazard problem and what does it require?
What will be an ideal response?
The Basel Capital Accord, which sets capital requirements, requirements for supervisory review, and for requirements for information disclosure.
You might also like to view...
A decrease in the foreign interest rate causes the demand for domestic assets to shift to the ________ and the domestic currency to ________, everything else held constant
A) right; appreciate B) right; depreciate C) left; appreciate D) left; depreciate
When good X is produced, some people benefit. A free-rider problem arises when
a. the number of people who benefit is small and it is impossible to prevent anyone from benefiting. b. the number of beneficiaries is small and it is possible to prevent some people from benefiting. c. the number of beneficiaries is large and it is impossible to prevent anyone from benefiting. d. the number of beneficiaries is large and it is possible to prevent some people from benefiting.
Liquidity refers to
a. the ease with which an asset is converted to the medium of exchange. b. the measurement of the intrinsic value of commodity money. c. the measurement of the durability of a good. d. how many time a dollar circulates in a given year.
Refer to the above figure. Suppose the economy is at E originally, when the dollar increases in value. Which aggregate supply curve applies if the value of real GDP increases?
A. 1 B. 2 C. 4 D. 5