A Problem with the Too-Big-To-Fail Policy Is That It ________

question 15

Multiple Choice

A problem with the too-big-to-fail policy is that it ________ the incentives for ________ by big banks.

• A)increases;moral hazard
• B)decreases;moral hazard
• C)decreases;adverse selection
• D)increases;adverse selection

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Definitions:

Entities

Individuals, organizations, or businesses that exist as distinct and independent units, often for legal or business purposes.

Organization

An arranged group of people working together towards common goals, typically structured and managed to meet a need or to pursue collective goals.

Mission Statement

An official synopsis of the intentions and moral values of a firm, group, or individual.

Culture

The sum of attitudes, customs, and beliefs that distinguishes one group of people from another, transmitted through language, material objects, ritual, institutions, and art.