An Important Consequence of Regulations That Reduce Competition Among Banks

question 27

Multiple Choice

An important consequence of regulations that reduce competition among banks is

• A)a sharp reduction in the number of banks.
• B)an incentive for unregulated financial institutions and markets to compete with banks.
• C)an increase in moral hazard in banks' behavior.
• D)lower interest rates on bank loans than would otherwise exist.

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Definitions:

Flag Salute

A formal gesture of respect made towards a national flag, often involving specific movements or postures.

Establishment Clause

A provision in the First Amendment of the U.S. Constitution that prohibits the government from establishing an official religion or unduly favoring one religion over another.

First Amendment

An amendment to the U.S. Constitution that protects freedoms concerning religion, expression, assembly, and the right to petition.

Fourteenth Amendment

The Fourteenth Amendment to the United States Constitution, ratified in 1868, grants citizenship to all persons born or naturalized in the U.S., including formerly enslaved people, and provides all citizens with “equal protection under the laws.”