Bank examinations by the FDIC help reduce the ________ problem, by preventing bank managers from allocating funds already obtained from depositors to non-creditworthy loans
A) adverse selection B) moral hazard C) contrary selection D) principled hazard
B
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Other things being equal, an increase in the default risk of corporate bonds shifts the demand curve for corporate bonds to the ________ and the demand curve for Treasury bonds to the ________
A) right; right B) right; left C) left; right D) left; left
The work of Robert Lucas and Thomas Sargent ________ the existence of a downward-sloping Phillips Curve in the ________
A) first proposed, short run B) first proposed, short and long runs C) cast further doubt on, long but not short run D) cast further doubt on, short and long runs
Suppose that the implicit cost for a business was $1,000 and the explicit cost was $5,000 and that the firm sold 1,000 units of its products at $6 per item. We can conclude that the firm's
A) accounting profit was $6,000, and its economic profit was $0. B) accounting and economic profits were both $0. C) accounting profit was $1,000, and economic profit cannot be determined. D) accounting profit was $1,000, and economic profit was $0.
Bank A has checkable deposits of $510 million and total reserves of $55.2 million. The required reserve ratio is 9 percent. The bank has excess reserves of ______________ million.
A. $9.3 B. $50.2 C. $454.8 D. $45.9