If a government requires domestic banks to lend to certain industries, creating a situation in which the firms know they will receive funding no matter how they use the funds, then the government has created a problem called: Select one: a. structural moral hazard. b. herding behavior. c. contagion. d. regulatory arbitrage.

If a government requires domestic banks to lend to certain industries, creating a situation in which the firms know they will receive funding no matter how they use the funds, then the government has created a problem called: Select one: a. structural moral hazard. b. herding behavior. c. contagion. d. regulatory arbitrage.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter14: Macroeconomic Policy: Tradeoffs, Expectations, Credibility, And Sources Of Business Cycles

Section: Chapter Questions

Problem 7E

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