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.
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After a tariff is imposed on a good, the price of the good
A) does not change. B) falls. C) rises. D) rises only if the domestic demand for the good does not change. E) might rise, fall, or not change depending on whether the government did or did not simultaneously impose a quota.
Refer to Figure 12-2. What is the amount of profit if the firm produces Q2 units?
A) It is equal to the vertical distance c to g multiplied by Q2 units. B) It is equal to the vertical distance g to Q2. C) It is equal to the vertical distance c to Q2. D) It is equal to the vertical distance c to g.
New growth theory is concerned with
A) finding a good way to measure economic growth. B) increasing the savings rate in the U.S. C) understanding the forces that increase productivity. D) understanding how compounding works.
The interest rate would fall and the quantity of money demanded would
a. increase if there were a surplus in the money market. b. increase if there were a shortage in the money market. c. decrease if there were a surplus in the money market. d. decrease if there were a shortage in the money market.