Banking crises have occurred throughout the world. What similarities do we find when we look at the different countries?
What will be an ideal response?
Financial deregulation with inadequate supervision can lead to increased moral hazard as banks take on more risk. Although deposit insurance was not necessarily a major factor in every country's bank crisis, there was always some kind of government safety net. The presence of the government safety net also leads to increased risk-taking from the banks.
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When a production quota is used to remedy the problem of the commons, then
A) the production quota is set so that use of the resource is where marginal private benefit equals marginal private cost. B) the production quota is set so that use of the resource is where marginal social benefit equals marginal private cost. C) the market equilibrium, but not the efficient outcome, is achieved. D) all users of the resource have an incentive to cheat on the quota quantity.
Which of the following is an example of physical capital?
a. the computer a secretary uses b. rivers on which goods are transported c. the skills and knowledge of a doctor d. All of the above are correct.