Regular Bank Examinations and Restrictions on Asset Holdings Help to Indirectly

question 60

Multiple Choice

Regular bank examinations and restrictions on asset holdings help to indirectly reduce the ________ problem because,given fewer opportunities to take on risk,risk-prone entrepreneurs will be discouraged from entering the banking industry.

• A)moral hazard
• B)adverse selection
• C)ex post shirking
• D)post-contractual opportunism

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Definitions:

Aerobic Exercise

Physical activity that improves cardiovascular fitness by raising the heart rate and increasing the body’s use of oxygen.

Overestimate

To assess a quantity or value too high in relation to its actual value.

Feel-Good,Do-Good Phenomenon

The observation that people are more likely to help others when they are in a good mood themselves.

Healthy Grandson

Indicates a male grandchild who is in a state of good physical and mental health.