The Moral Hazard Problem Caused by Government Safety Nets

question 19

Multiple Choice

The moral hazard problem caused by government safety nets:

• A) is greater for larger banks.
• B) is greater for smaller banks.
• C) is pretty constant across banks of all sizes.
• D) only exists for banks with high leverage ratios.

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Definitions:

Primary Alcohol

An alcohol with the hydroxyl group (-OH) attached to a carbon atom that is connected to only one other carbon atom.

Grignard-Based Synthesis

A method of forming carbon-carbon bonds by reacting Grignard reagents (organomagnesium compounds) with electrophiles, crucial in the formation of alcohols, carboxylic acids, and other functional groups.

Benzyl Bromide

An organic compound consisting of a benzene ring attached to a bromomethyl group, used as a chemical intermediate in synthesis.

3-Phenylpropan-1-ol

An organic compound that is a member of the alcohol functional group and is characterized by a phenyl ring attached to a three-carbon chain ending with an -OH group.