Which of the following has been a problem faced by the FDIC in its provision of federal deposit insurance?
A) moral hazard arising from the tendency for the highest-risk banks to be those most interested in obtaining deposit insurance in the first place
B) adverse selection arising from the tendency for banks to take on more risk after they receive deposit insurance
C) moral hazard arising from the tendency for banks to take on more risk after they receive deposit insurance
D) a relatively low number of bank failures each year, which has reduced the need for deposit insurance
Correct Answer:
Verified
Q480: Suppose that the Fed purchases $1,000,000 worth
Q481: The FDIC was created because
A) banks failed
Q482: The Federal Deposit Insurance Corporation
A) insures the
Q483: Explain how the Fed increases the money
Q484: If the FDIC eliminated its insurance program
Q486: Asymmetric information before a transaction takes place
Q487: Deposit insurance shields depositors from the adverse
Q488: How are the assets and liabilities changed
Q489: As of 2017, the FDIC insured deposit
Q490: Asymmetric information before a transaction takes place
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