To Address the Decreasing Balance of the FDIC Deposit Insurance

question 37

Multiple Choice

To address the decreasing balance of the FDIC deposit insurance fund during the financial crisis of 2007-2008

• A)deposit insurance programs were suspended for a period of three months.
• B)the FDIC increased individual depositor insurance coverage from $100,000 to $250,000.
• C)the FDIC announced that it would no longer honor deposit insurance coverage of some failing DIs.
• D)two special assessments were levied on institutions participating in the FDIC insurance programs.
• E)the U.S.Treasury had to take over management of the FDIC.

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Definitions:

Carrying Cost

The total expense of holding a particular asset over time, including storage, insurance, and taxes, but excluding buying cost.

Order Cost

Expenses incurred in placing and receiving orders from suppliers, including costs related to processing, shipping, and handling.

Economic Order Quantity

The ideal order size to minimize total inventory costs including ordering, carrying, and stockout costs.

Variable Cost

A cost that varies with the level of output or production activity, increasing as production increases and decreasing as production decreases.