Banks can effectively choose their regulators by deciding whether to:
A. be a private or public corporation.
B. be chartered at the national or state level.
C. be a member of the Federal Reserve or not.
D. purchase FDIC insurance or to forego the coverage.
Answer: B
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Lucy is a young entrepreneur who sells lemonade from her lemonade stand in her driveway on Saturday afternoons. During the first hour, Lucy sells 30 glasses of lemonade and incurs an average variable cost of $0.20. Lucy's _________ for the first hour are __________
Fill in the blank(s) with the appropriate word(s).
What can be done to deal with the principal-agent problem?
A) forbid managers from owning any company stock B) have the CEO be a rotating position C) link top manager salaries to the profits of the firm or the price of the firm's stock D) threaten to liquidate the firm