Behind the Glass-Steagall Act was the feeling that __________ is too risky for commercial banks
A) underwriting corporate securities
B) competing to pay high deposit rates
C) making business mortgage loans
D) interstate branching
A
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When you have an omitted variable problem, the assumption that E(ui Xi) = 0 is violated. This implies that
A) the sum of the residuals is no longer zero. B) there is another estimator called weighted least squares, which is BLUE. C) the sum of the residuals times any of the explanatory variables is no longer zero. D) the OLS estimator is no longer consistent.
If a positive permanent supply shock were to occur, the resulting equilibrium would be a:
A. higher level of output at lower prices. B. lower level of output and prices. C. higher level of output and prices. D. lower level of output at higher prices.
If price is below the long-run competitive equilibrium level, there will be
A. Exit of firms from the market. B. Greater demand. C. Greater output. D. Positive economic profits.
If social returns to the production of a good are greater than private returns, then we can conclude that relative to the social optimum, the good will be
A) overproduced and underpriced. B) underproduced and overpriced. C) overproduced and overpriced. D) underproduced and underpriced.