Multiple Choice
Lender-of-last-resort LOLR moral hazard is:
A) the problem that the bank will keep too little liquidity because it knows the LOLR will provide it.
B) the problem that the LOLR may not provide the bank access to liquidity when needed.
C) the problem that the bank's financiers will not give it access to liquidity because they know the LOLR will provide it.
Correct Answer:
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