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:

Agricultural Products

Goods derived from farming and agriculture, including crops, livestock, and other raw materials.

Demand Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, indicating consumers' sensitivity to price changes.

Farm Production

The process and output involved in the cultivation of crops and the rearing of livestock for economic purposes.

Conservation Reserve Program

A land conservation program initiated by the U.S. government to improve water quality, prevent soil erosion, and enhance habitats for endangered and threatened species.