Which of the Following Would Not Address the Moral Hazard

question 79

Multiple Choice

Which of the following would not address the moral hazard problem?

• A)Establish strict regulations of the banks
• B)Design systems so that necessary financial transactions stayed within regulated banks
• C)Allow the government to take over the policy-making decisions of the Federal Reserve
• D)Separate banks from other financial institutions

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Definitions:

Adrenocorticotrophic Hormone

A hormone produced by the anterior pituitary gland that stimulates the production and release of cortisol from the adrenal gland.

Cortisol

A steroid hormone produced by the adrenal glands, often released in response to stress and low blood-glucose concentration.

Interpersonal Conflict

A situation in which two or more people in an interaction perceive incompatible goals or interference in achieving their objectives.

Approach-Avoidance Conflict

A psychological conflict occurring when a goal is both attractive and undesirable at the same time, creating internal emotional tension.