Which of the Following Government Policies Would Be Least Likely

question 22

Multiple Choice

Which of the following government policies would be least likely to encourage entrepreneurship?

• A) Passage of laws that enable businesspeople to write enforceable contracts
• B) Establishment of a currency that is tradable in world markets
• C) Establishment of strict regulations specifying exactly how products should be made to ensure safety and affordability
• D) Passage of laws that eliminate corruption in government and business

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Definitions:

Deposits

Money placed into a financial institution for safekeeping, which can earn interest over time.

Loans

Sums of money borrowed that are expected to be paid back with interest over a specified period.

100 Percent Reserve

A banking system where banks hold reserves equal to 100% of their deposit liabilities, meaning all deposits can be fully backed by liquid assets, reducing the risk of bank runs.

Fractional Reserve System

A banking system in which only a fraction of bank deposits are backed by actual cash on hand and available for withdrawal.