Banks Help Mitigate the Problem of Moral Hazard in Lending

question 41

Multiple Choice

Banks help mitigate the problem of moral hazard in lending by:

• A) requiring lengthy applications for loans.
• B) making loans to many different types of borrowers.
• C) adjusting the amount of the loan to fit the requirements of the borrower.
• D) monitoring the business after a loan is made to the business.

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Definitions:

Politically Weak

A condition or state in which an individual, group, or nation lacks political power, influence, or effective control.

Hispanic Americans

A term used to describe people in the United States who are descendants of individuals from Spanish-speaking countries, particularly from Latin America and Spain.

Anti-nuclear Movement

A social movement that opposes various nuclear technologies, often including nuclear power plants and weapons, due to concerns about safety, environmental, and moral implications.

Political Pressure

The use of influence, persuasion, or coercion by individuals or groups to effect political change or policy outcomes.