Proponents of Restricting the Size of Financial Institutions Believe This

Multiple Choice

Proponents of restricting the size of financial institutions believe this policy will _____, while opponents believe this policy will _____.

A) allow firms to take advantage of economies of scale; increase the volatility of the financial system.
B) reduce the number of financial institutions; give institutions the incentive to take excessive risks.
C) eliminate the need for deposit insurance; encourage imprudent risk taking
D) make the financial system more stable; lead to higher costs