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4.4.2 Market failure in the financial sector

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12
Question 2

Which of the following is most likely to result in market failure in the financial sector?

A

Commercial banks increasing the interest rate charged on loans to small, pre-revenue start-up companies.

B

Financial regulators requiring all credit rating agencies to register and publicly disclose their rating methodologies.

C

Investment bank executives receiving large performance bonuses based on short-term revenue generation rather than long-term asset quality.

D

Insurance companies offering discounted premiums to policyholders who install telematics tracking devices in their vehicles.

Markscheme

4.4.2 Market failure in the financial sector Questions

  1. A Level
  2. /Economics
  3. /4.4.2 Market failure in the financial sector

9 exam-style questions on Edexcel A A Level Economics 4.4.2 Market failure in the financial sector. Each one has a worked solution and a mark scheme showing where the marks go.

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