That Taxpayers Were Poorly Served by Thrift Regulators in the 1980s

question 18

Multiple Choice

That taxpayers were poorly served by thrift regulators in the 1980s is now quite clear.This poor performance is explained by

• A) regulators' desire to escape blame for poor performance, leading to a perverse strategy of "regulatory 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 unwillingness to appropriate sufficient funds to permit regulators to examine the many thrift institutions that needed monitoring.
• D) all of the above.
• E) only A and B of the above.

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Definitions:

Depletion Expense

An accounting and taxation method that allocates the cost of extracting natural resources, such as timber, minerals, and oil from the earth, over their extraction period.

Operating Expense

Ongoing costs for running a product, business, or system, excluding costs directly associated with producing goods or services.

Legal Life

The duration of time that an asset is legally permitted to be utilized, or the period during which a patent or copyright is protected under law.

Useful Life

The estimated period over which an asset is expected to be used before it is considered no longer useful by the owner.