Why Would a U

question 74

Multiple Choice

Why would a U.S. bank open a foreign branch bank instead of a foreign chartered subsidiary?

• A)This form of bank organization allows the bank to be able to extend a larger loan to a customer than a locally chartered subsidiary bank of the parent.
• B)To slow down check clearing and maximize the bank's float.
• C)To avoid U.S. banking regulation.
• D)Both a and c

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Definitions:

Subsidies

Subsidies are financial contributions provided by the government to encourage the production or consumption of a good or service, often to support industries that are considered vital for the national economy.

Incentives

Rewards or penalties that motivate individuals to take specific actions.

Sweden

A Scandinavian country known for its high standard of living, strong welfare state, and active role in international peace and security.

Market Failure

A situation in which the allocation of goods and services by a free market is not efficient, often justifying government intervention.