Moral Hazard Is a Problem in Providing Deposit Insurance Because

question 29

Multiple Choice

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

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

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Definitions:

Imperative

A grammatical mood expressing commands, demands, or requests in a sentence.

Vocative

A grammatical case used to denote the addressing or calling of someone directly in a sentence.

Unprecedented Rate

A speed or pace of change that has never been encountered before, often used to describe rapid technological, environmental, or societal shifts.

Compound Sentence

A sentence type that includes at least two independent clauses, typically connected by conjunctions.