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Business, 15.02.2021 05:40 bakerx8529

In the financial crisis of 2008, the government bailed out banks that were in danger of failing because of risky investments in the housing market. Billions of dollars from the taxpayers and the Federal Reserve were provided to these banks through loans and stock purchases. Critics of these policies said that if these banks believe they will be bailed out after making excessively risky investments, they will have no incentive to be more careful in the future. The critics were considering which kind of market failure? 1 Moral hazard
2 Asymmetric information with inadequate information about the seller
3 Asymmetric information with inadequate information about the buyer
4 Adverse selection​

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