The Too-Big-To-Fail Policy

question 81

Multiple Choice

The too-big-to-fail policy

• A)reduces moral hazard problems.
• B)puts large banks at a competitive disadvantage in attracting large deposits.
• C)treats large depositors of small banks inequitably when compared to depositors of large banks.
• D)allows small banks to take on more risk than large banks.

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Definitions:

P(B)

The likelihood that event B will happen.

Drunk Drivers

Individuals who operate a vehicle while under the influence of alcohol, significantly increasing the risk of accidents and impairments in judgement and coordination.

Proportion

A part, share, or number considered in comparative relation to a whole.

Independent

Not influenced or controlled by others; acting freely.