If the Government Did Not Offer the Too-Big-To-Fail Safety Net

question 101

Multiple Choice

If the government did not offer the too-big-to-fail safety net:

• A)Large banks would be more disciplined by the potential loss of large corporate accounts
• B)The moral hazard problem of insuring large banks would increase
• C)The moral hazard problem of insuring large banks would not be affected
• D)The FDIC deposit insurance limits would have to be raised

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Definitions:

Consistent

In the context of systems of equations, it describes a system that has at least one solution.

Inconsistent

A term used to describe a system of equations that has no solution because the equations represent parallel lines.

Elimination

A method for solving a system of equations by adding or subtracting the equations in order to eliminate one of the variables.

Positive Integers

Whole numbers greater than zero.