Governments Employ Three Strategies to Contain the Risks Created by Government

question 12

Multiple Choice

Governments employ three strategies to contain the risks created by government safety nets. These include each of the following, except:

• A) government supervision.
• B) an excise tax on bank profits.
• C) government regulation.
• D) formal bank examination.

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Definitions:

Spot Exchange Rates

The current exchange rate at which a currency can be bought or sold for immediate delivery.

Speculative Derivatives

Financial instruments used to speculate on the future movements of asset prices, without intention of holding the underlying assets.

Net Income

The total amount of profit earned by a company after all expenses and taxes have been subtracted from revenue.