The argument that deposit insurance can prevent the failure of an otherwise sound bank is based on the idea that
A) potential deposits need not be concerned about account overdrafts.
B) the existence of deposit insurance may prevent self-fulfilling panics.
C) deposit insurance restores confidence in the stock market.
D) bank examinations by the Canada Deposit Insurance Corporation (CDIC) weed out badly managed banks.
E) deposit insurance restores confidence in the bond market.
Correct Answer:
Verified
Q1: A consumer is said to be risk-averse
Q3: Which asset is least liquid?
A)a chequing deposit
B)a
Q4: The Diamond-Dybvig model does NOT
A)provide an account
Q5: The phenomenon in which an insured individual
Q6: The Diamond-Dybvig model provides a rationale for
Q7: In Canada, the Canada Deposit Insurance Corporation
Q8: In the Diamond-Dybvig model, the bank's deposit
Q9: A stock in Microsoft is
A)more risky than
Q10: In a bank run in the Diamond-Dybvig
Q11: In the Diamond-Dybvig model
A)consumers are not risk
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