When the Government Bails Out Failing Banks, It Creates a Moral

question 40

True/False

When the government bails out failing banks, it creates a moral hazard problem; but when the
government bails out homeowners who are defaulting on their mortgages, there is no moral hazard
problem.

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Definitions:

Condition

A provision in a contract or agreement that stipulates a specific event or action must occur before the contract is considered effective or a duty is triggered.

Appurtenant

is a legal term referring to rights or properties that are attached to and benefit a primary property, transferring with the title of that property from one owner to another.

Easement

A legal right to use another person's land for a specific limited purpose.

Land Adjacent

Property that is next to or bordering another property.