(2 points) The McFadden Act of 1927 is best known for A creating the Federal Reserve system. B. reinforcing the branching restrictions that resulted in a system of thousands of small banks. C. creating the Federal Deposit Insurance Corportation (FDIC) D. separating commercial banking, investment banking and insurance activities. 17. 18. (e points) Once borrowers have taken out a loan, they may act in their own self interest instead acting in the interest of the lender. An example is a mortgage borrower "walking" altering the property or using it for somothing other than the agreed upon use. This is an example of A. adverse selection problem. B. lemon problem C. free-rider problen D. moral hazard problem 19. (e ointy) Which of the aollowing can monetary policy makers do to (isignificanthy) increase the monetary base? A. purchase securities in the open market B. sell securities in the open market C. decrease the reserve requirement D. decrease the interest rate paid on excess reserves E. change capital requirements of banks 20. (e points) During the Great Depression A. the ecoeonay experienced high inflation. B. hoaseholds moved to hokling riskier assets C. households withdrew fands from banks and the money maltiplier decressed. D. the Federal Reserve reduced the reserve requirenents of banks and the money maltipliesr decrease