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How Does the Lender of Last Resort Potentially Create a Moral

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How does the lender of last resort potentially create a moral hazard problem?


Definitions:

Specification Limit

Predetermined bounds within which a product or process’s performance must fall to be considered acceptable, often used in quality control.

Standard Deviation

A statistic that measures the dispersion or spread of a set of numbers.

Process Capability Index

A statistical measure that quantifies how well a process is able to produce output within specified limits.

Specification Fill Weight

The predetermined or designed weight of product that a package is intended to hold.

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