To Offset the Moral Hazard Problem Created by the FDIC

question 88

Multiple Choice

To offset the moral hazard problem created by the FDIC, the government:

• A)created securities to spread the risks.
• B)created the Federal Reserve Bank.
• C)separated banks from other financial institutions.
• D)required individuals to pay a portion of the insurance costs.

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Definitions:

Albert Bandura

Albert Bandura is a psychologist known for his work on social learning theory, emphasizing the role of observational learning, self-efficacy, and reciprocal determinism in human behavior.

Heritability Ratio

An estimate of the proportion of trait variability in a population that is determined by variations in genetic inheritance.

Trait Variability

The degree to which individuals differ from one another in terms of specific characteristics or traits.

Genetic Inheritance

The process by which genetic information is passed on from parents to their offspring, determining traits.