Which of the following is NOT a potential problem due to federal depository insurance?
A. Depositors demand greater interest rates on their deposits to compensate them for the riskier behavior of the managers of the depository institutions.
B. Depositors have little incentive to monitor the behavior of the managers of the depository institutions.
C. Banks have an incentive to make riskier loans than they would otherwise.
D. Lenders have less incentive to investigate the credit-worthiness of borrowers.
Answer: A
You might also like to view...
The return-to-entrepreneurship curve is:
A) horizontal. B) vertical. C) downward sloping. D) upward sloping.
The supply curve slopes upward when graphed against ________, because of ________
A) the price of the good; increasing marginal cost B) the price of the good; decreasing marginal cost C) income; increasing marginal cost D) income; decreasing marginal cost
If a firm wants to maximize profits, it should hire workers up to the point at which
A) total factor cost = total revenue. B) marginal factor cost = marginal revenue product. C) marginal utility = marginal cost. D) total social benefit = total social costs.
Rents can be derived from any factor used in production
Indicate whether the statement is true or false