Moral Hazard Is a Problem in Providing Deposit Insurance Because

Moral hazard is a problem in providing deposit insurance because insured banks are

A) encouraged to take on more risk.
B) overly cautious due to extra regulations adopted by the Canada Deposit Insurance Corporation.
C) more likely to offer interest rates on loans that are greater than market interest rates.
D) more likely to provide bank managers with lavish perquisites.
E) more likely to make bookkeeping errors.