the economics of money, banking, and financial markets

216 #

© 2014 Pearson Canada Inc.#

15. 
    

    One purpose of regulation of financial markets is to ____.
    A) limit the profits of financial institutions
    B) increase competition among financial institutions
    C) promote the provision of information to shareholders, depositors and the public
    D) guarantee that the maximum rates of interest are paid on deposits
    Answer: C
    Diff: 2 Type: MC Page Ref: 162
    Skill: Recall
    Objective List: 8.1 Depict how asymmetric information results in adverse selection and moral
    hazard

    
    


16. 
    

    Property that is pledged to the lender in the event that a borrower cannot make his or her debt
    payment is called ____.
    A) collateral
    B) points
    C) interest
    D) good faith money
    Answer: A
    Diff: 1 Type: MC Page Ref: 163
    Skill: Recall
    Objective List: 8.1 Depict how asymmetric information results in adverse selection and moral
    hazard

    
    


17. 
    

    Collateralized debt is also know as ____.
    A) unsecured debt
    B) secured debt
    C) unrestricted debt
    D) promissory debt
    Answer: B
    Diff: 1 Type: MC Page Ref: 163
    Skill: Recall
    Objective List: 8.1 Depict how asymmetric information results in adverse selection and moral
    hazard

    
    


18. 
    

    Credit card debt is ____.
    A) secured debt
    B) unsecured debt
    C) restricted debt
    D) unrestricted debt
    Answer: B
    Diff: 1 Type: MC Page Ref: 163
    Skill: Recall
    Objective List: 8.1 Depict how asymmetric information results in adverse selection and moral
    hazard