Moral Hazard and Adverse Selection Problems Increased in Prominence in the 1980s

question 34

Multiple Choice

Moral hazard and adverse selection problems increased in prominence in the 1980s

• A) as deregulation opened up more avenues for savings and loans and mutual savings banks to take on more risk.
• B) following a burst of financial innovation in the 1970s and early 1980s that produced new financial instruments and markets, thereby widening the scope for risk taking.
• C) following an increase in federal deposit insurance from $40,000 to $100,000.
• D) because of all of the above.
• E) because of only A and B of the above.

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Definitions:

Protein Substance

A type of biological molecule composed of one or more chains of amino acids, critical for the structure, function, and regulation of the body's tissues and organs.

Scar

The fibrous tissue that replaces normal skin after an injury or surgical incision as part of the healing process.

BCC

Basal Cell Carcinoma, a common form of skin cancer that begins in the basal cells.

Chronic Skin Condition

A long-lasting or recurrent issue affecting the skin, like eczema or psoriasis.