One intention of deposit insurance is to reduce the danger of
A)excess lending.
B)excess profits.
C)risky lending.
D)bank runs.
E)All of the above are correct.

Question

Quizplus · Accepted Answer

Deposit insurance is intended to reduce the danger of bank runs, which occur when depositors lose confidence in the banking system and all try to withdraw their money at the same time. By insuring deposits, deposit insurance provides reassurance to depositors that their money is safe and secure, reducing the likelihood of a bank run. The other answer choices are not directly related to the intentions of deposit insurance.

One Intention of Deposit Insurance Is to Reduce the Danger