If a government requires domestic banks to lend to certain industries, creating a situation in which the firms know they will receive funding no matter how they use the funds, then the government has created a problem called:   Select one:   a. structural moral hazard. b. herding behavior. c. contagion. d. regulatory arbitrage.

Economics:
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Author:BOYES, William
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Chapter14: Macroeconomic Policy: Tradeoffs, Expectations, Credibility, And Sources Of Business Cycles
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If a government requires domestic banks to lend to certain industries, creating a situation in which the firms know they will receive funding no matter how they use the funds, then the government has created a problem called:
 
Select one:
 
a. structural moral hazard.
b. herding behavior.
c. contagion.
d. regulatory arbitrage.
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