The Government Safety Net Creates ________ Problem Because Risk-Loving Entrepreneurs

question 59

Multiple Choice

The government safety net creates ________ problem because risk-loving entrepreneurs might find banking an attractive industry.

• A)an adverse selection
• B)a moral hazard
• C)a lemons
• D)a revenue

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Definitions:

Assets

Assets are resources owned by a company that have economic value and can be used to meet debts, commit to investments, or generate income.

Liabilities

Future sacrifices of economic benefits that the entity is presently obliged to make to other entities as a result of past transactions or events.

Income Statement

A financial document that reports a company's financial performance over a specific period, detailing revenues, expenses, and net income or loss.

Common Stock

Common stock represents units of ownership in a corporation, granting holders voting rights and a share in the company's profits, often through dividends.