Regular Bank Examinations and Restrictions on Asset Holdings Help to Indirectly

question 60

Multiple Choice

Regular bank examinations and restrictions on asset holdings help to indirectly reduce the ________ problem because,given fewer opportunities to take on risk,risk-prone entrepreneurs will be discouraged from entering the banking industry.

• A)moral hazard
• B)adverse selection
• C)ex post shirking
• D)post-contractual opportunism

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Definitions:

Prototype

A prototype is an original or first model of something from which other forms are copied or developed, often used in the context of designs, inventions, or the formation of categories in cognition.

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Colour perception is the process by which the human eye and brain translate light waves into colour, influenced by physical, psychological, and contextual factors.

Colour Name

The term or designation given to a specific hue, tone, or shade identified within the visual spectrum.

Cognitive Psychologists

Professionals who study how people understand, think, learn, and remember information.