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

---

Definitions:

Aggression

Behavior intended to harm or intimidate others, which can be physical or verbal.

Bandura

A psychologist known for his work on social learning theory and the concept of self-efficacy.

Observation

The process of closely monitoring or watching something or someone to gain information.

Bobo Doll

Refers to a classic experiment by Albert Bandura that demonstrated how children can learn aggressive behaviors through observation of adult models.