Multiple Choice
Moral hazard occurs when:
A) the failure of one financial institution can bring down other institutions as well.
B) financial institutions take on too much risk because they are insured.
C) financial institutions become insolvent because they issued too many loans.
D) there are more short-term liabilities than short-term assets.
Correct Answer:

Verified
Correct Answer:
Verified
Q1: To reduce the money supply in the
Q2: When banks borrow directly from the Fed,the
Q3: The Fed loaned money to J.P.Morgan and
Q4: Which is included in M2?<br>A) currency<br>B) checkable
Q6: What is systemic risk and how does
Q7: The reserve ratio is the ratio of
Q8: An increase in money growth will cause
Q9: If the Fed buys government bonds,which will
Q10: Which is NOT true of the Federal
Q11: The interest rate that the Fed charges