The government bailout of large institutions creates the problem of moral hazard, which means that these large firms will
A) not be able to pay back the bailout money.
B) have an incentive to make highly risky investments.
C) now have to play it safer to reduce their risks.
D) be limited in terms of the securities and services that they get involved in.
Correct Answer:
Verified
Q189: Which of the following bank-related policies of
Q191: The bailout money that went to giant
Q192: Securitization, the process of forming new securities
Q195: Insurance companies mainly acquire households’ savings by
A)selling
Q196: Which of the following is not one
Q197: Which of the following financial institutions pool
Q198: Which of the following is not a
Q199: The so-called too-big-to-fail policy has two conflicting
Q218: The so-called moral hazard problem refers to
Q220: "Thrifts" refers to the following institutions except
A)
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