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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

Correct Answer:

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