All of the following are investment policies that most likely increase equilibri
ID: 1221004 • Letter: A
Question
All of the following are investment policies that most likely increase equilibrium income/output except: A. a government policy that eases bank lending requirements. B. a government policy of merging troubled banks with sound banks to prevent bank failures that might interrupt the flow of credit. C. a government policy to insure bank deposits to avoid bank failures that interrupt the flow of credit. D. a government policy that strengthens bank accounting rules to crack down on troubled banks that have used creative accounting to avoid failure.
Explanation / Answer
Answer D is correct .
Option D will not lead to increase in equilibrium income/output. it is not directly related to increase in income. it is a method of accounting. Creative accounting may survive for some time, its a way to note down your taransactions
Strengthings accounting rules may helpful for improve condition of crack down banks. but not for generation of income/output .