Regulatory forbearance
A) meant delaying the closing of "zombie S&Ls" as their losses mounted during the 1980s.
B) had the advantage of benefiting healthy S&Ls at the expense of "zombie S&Ls," as insolvent institutions lost deposits to health institutions.
C) had the advantage of permitting many insolvent S&Ls the opportunity to return to profitability, saving the FSLIC billions of dollars.
D) increased adverse selection dramatically.
A
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John has $40 to spend on pizza and tacos. Pizza costs $10 each and tacos are $1 per taco. John's real income ________
A) is $40 B) is 4 pizzas or 40 tacos C) is 4 pizzas plus 40 tacos D) depends only on his money wage
If a firm does NOT know its rival's profit function, then we consider that information to be
A) irrelevant in deciding its best strategy. B) private. C) common knowledge. D) Pareto sub-optimal.
What can we do to deal with the externalities associated with public goods and common resources?
a) Private markets will lead to an efficient allocation of resources. b) Government intervention can potentially raise economic well-being. c) Private markets will correct for the gain or loss to consumer surplus. d) Government intervention can completely eliminate the free-rider problem.
Suppose that the United States and Spain both produce cognac and handbags. In the United States, cognac sells for $20 a bottle and handbags sell for $80. In Spain, cognac sells for 30 euros a bottle and handbags sell for 40 euros. Given this information, trade will flow in both directions if the price of a dollar is between
A. 0.67 and 2.0 euros. B. 1.5 and 2.5 euros. C. 0.5 and 0.75 euro. D. 2.0 and 3.0 euros.