Internal markets
A) do not have the same problems as external markets.
B) have externalities but do not fail.
C) have the same problems as external markets.
D) are more useful relative to external markets.
C
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Which of the following is a consequence of deposit insurance?
A) It may induce the officers of a bank to take more risks. B) It encourages banks to make loans only to the most credit-worthy customers. C) It minimizes the risk of defaulting on loans made to the bank's customers. D) It encourages depositors to closely scrutinize a bank's lending activities.
A depreciation in the value of the U.S. dollar would:
A. encourage foreigners to travel on American owned airlines. B. make U.S. goods more expensive to foreign consumers. C. decrease the number of dollars it takes to buy a Swiss franc. D. make it more expensive for U.S. citizens to travel abroad.