Bank Regulators Impose Capital Requirements in Order to

question 369

Multiple Choice

Bank regulators impose capital requirements in order to

• A)increase the amount of leverage in the economy.
• B)provide an incentive for banks to hold risky assets.
• C)ensure banks can pay off depositors.
• D)increase the probability of a credit crunch.

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Definitions:

Asymmetric Centers

An asymmetric center in a molecule is a carbon or other atom bonded to four different groups, creating chirality and enabling optical activity.

Specific Rotation

A measure of the amount a substance rotates the plane of polarized light, specific to its molecular structure and concentration.

Dextrorotatory

Describes a substance that rotates the plane of polarized light to the right, or clockwise, as seen by an observer towards the light source.

Levorotatory

Describing a substance that rotates the plane of polarized light to the left or counterclockwise.