Taxpayers Were Served Poorly by Thrift Regulators in the 1980s

question 22

Multiple Choice

Taxpayers were served poorly by thrift regulators in the 1980s. This poor performance cannot be explained by

• A)regulators' desire to escape blame for poor performance,leading to a perverse strategy of "bureaucratic gambling."
• B)regulators' incentives to accede to pressures imposed by politicians,who sought to keep regulators from imposing tough regulations on institutions that were major campaign contributors.
• C)Congress's dogged determination to protect taxpayers from the unsound banking practices of managers at many of the nation's savings and loans.
• D)politicians strong incentives to act in their own interests rather than the interests of the taxpayers.

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Definitions:

Growth Rate

The rate at which a company's earnings, sales, or dividends increase over a given period, usually expressed as a percentage.

Annual Dividend

A yearly payment made by a corporation to its shareholders, often derived from its earnings.

Required Rate

The minimum acceptable return on an investment, often used in capital budgeting and investment analysis.

Expected Growth Rate

The anticipated rate at which a company, investment, or value of an asset is expected to grow over a specified period.