Commercial banks limit the adverse selection problem through ________
A) monitoring
B) restrictive covenants
C) screening
D) moral hazard
C
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What is the most common measure of a firm's capital stock, and why is it not the most important to focus on?
What will be an ideal response?
__________ are the best example of securities that trade primarily in a brokered market
A) Common stocks B) Corporate bonds C) Municipal bonds D) Tombstones
The change in the savings rate during the 1990s is NOT consistent with
A) Friedman's permanent-income hypothesis. B) Modigliani's life cycle hypothesis. C) the boom in the stock market. D) All of the above.
If the actual federal funds rate is 9 percent and the Fed's target federal funds rate is 8 percent, the Fed is most likely to adopt which of the following policies?
A. A sale of government bonds B. A reduction in the reserve requirement C. A more contractionary monetary policy D. An increase in the discount rate