Which of the Following Is Least Likely to Accompany Financial

question 19

Multiple Choice

Which of the following is least likely to accompany financial consolidation and the development of large,complex banking organizations?

• A) More financial institutions will be considered too big to fail.
• B) The government safety net will be extended to include nonbanking activities.
• C) Moral hazard problems will become less important.
• D) Banks will have greater incentives and opportunities to take on more risk.

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Definitions:

Foreign-Currency Exchange

The process of exchanging one country's currency for another's, often determined by market rates.

Budget Deficit

The situation in which a government's expenditures exceed its revenue, resulting in the need to borrow money or increase taxes.

Loanable Funds

Describes the market where savers supply funds for loans to borrowers, influencing interest rates and investment.

Government Budget Deficit

A government budget deficit occurs when a government spends more money than it receives in revenue over a given period.