Government-backed deposit insurance increases the ________. A) ...

[michelleunicorn]

Government-backed deposit insurance increases the ________.
 
  A) Willamette torsion effect
  B) adverse selection problem
  C) moral hazard problem
  D) the prudential contagion problem

Question 2

Based on the Saving-Investment Diagram, if the world real interest rate is indicated by A, then ________.
 
  A) the difference between values G and E measures the trade surplus
  B) the difference between values G and F measures the trade surplus
  C) the domestic real interest rate is indicated by B
  D) desired saving has decreased
  E) none of the above

[gabrielle_lawrence]

Answer to Question 1

C

Answer to Question 2

A

[michelleunicorn]

Excellent

[juliaf]

Gracias!