An Argument That Supports a Regulated Minimum Capital Requirement Is

question 3

Multiple Choice

An argument that supports a regulated minimum capital requirement is that banks that hold too little capital

• A) are unprofitable.
• B) impose costs on other banks because they are more likely to fail.
• C) have an unfair competitive advantage over savings and loans.
• D) includes all of the above.

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Definitions:

Causality

The relationship between cause and effect, often studied to understand how one variable or event influences another within various contexts.

Normative Statement

A statement that expresses a value judgement or an opinion about what ought to be, rather than an objective or fact-based assertion.

Advanced Nation

A term synonymous with developed countries, signifying a country with a high level of economic development and standard of living.

Policy Recommendation

A proposal provided by experts or analysts on specific ways to address a particular issue or to improve a situation.