The Decision by Regulators During the S&L Crisis to Offer

question 6

Multiple Choice

The decision by regulators during the S&L crisis to offer led to increasingly risky loan making because of the problem of .

• A)forbearance; moral hazard
• B)resurrection; adverse selection
• C)forbearance adverse selection
• D)floating; low security returns

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Definitions:

Eardrum

The eardrum, also known as the tympanic membrane, is a thin membrane that separates the outer ear from the middle ear and vibrates in response to sound waves.

ENT

Ear, Nose, and Throat; a branch of medicine concerned with the diagnosis and treatment of disorders of the head and neck.

Air Conduction

The process by which sound waves travel through the air in the external auditory canal to the eardrum and middle ear, facilitating hearing.

AC

Alternating Current, a type of electrical current in which the flow of electric charge periodically reverses direction.