Moral Hazard Is a Problem in Providing Deposit Insurance Because

question 45

Multiple Choice

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

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

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Definitions:

Discovery

A pre-trial procedure in a lawsuit where each party can obtain evidence from the opposing party through depositions, interrogatories, and document requests.

Minimum Contact Requirements

The legal standard that must be met for an out-of-state defendant to be sued in the plaintiff's state court under the jurisdiction of that court.

Personal Service

A type of business or service that is provided directly to individual customers, tailoring to their personal needs or requirements.

International Shoe Co. v. State of Washington

A landmark Supreme Court case establishing the standard for what constitutes sufficient minimum contacts within a state for the exercise of jurisdiction over an out-of-state defendant.