The Free-Rider Problem Occurs Because

question 32

Multiple Choice

The free-rider problem occurs because

• A) members of Congress are presented with many opportunities to amend a piece of legislation.
• B) the government subsidizes most forms of transportation in the United States.
• C) the benefits of a group's actions are available only to a specific segment of society.
• D) the benefits of a group's actions are broadly available and cannot be denied to nonmembers.
• E) members of Congress listen only to organized interest groups and not to public opinion polls.

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Definitions:

Financial Intermediaries

Organizations that facilitate the channeling of funds between savers and borrowers, including banks, credit unions, and insurance companies.

Welfare Banks

Financial institutions focused on providing services and support to individuals in need, though not a widely recognized term in traditional finance.

Credit Unions

Member-owned financial cooperatives that provide savings, credit, and other financial services to their members.

Check-Cashing Stores

Businesses that offer check cashing services and other financial transactions, often serving underbanked communities.