Regular Bank Examinations and Restrictions on Asset Holdings Indirectly Help

question 45

Multiple Choice

Regular bank examinations and restrictions on asset holdings indirectly help to reduce the ________ problem because,given fewer opportunities to take on risk,risk-prone entrepreneurs will be discouraged from entering the banking industry.

• A) moral hazard
• B) adverse selection
• C) ex post shirking
• D) post-contractual opportunism

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