The Moral Hazard Problem Is Minimized When Deposit Insurance Premiums

question 8

Multiple Choice

The moral hazard problem is minimized when deposit insurance premiums are

• A)zero (not imposed by the FDIC).
• B)the same for all banks.
• C)set at a fixed rate for large banks and at zero for small banks.
• D)based on the bank's risk.

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Definitions:

NAACP

The National Association for the Advancement of Colored People, a civil rights organization in the United States founded in 1909 to fight prejudice, lynching, and Jim Crow segregation.

Socialist Movement

A political and social movement advocating for the ownership and administration of the means of production and distribution by the community as a whole or the state, aiming to establish a society characterized by equal access to resources and opportunities.

Marcus Garvey

A Jamaican political activist, publisher, journalist, entrepreneur, and orator who was a staunch proponent of the Black nationalism and Pan-Africanism movements.

Steamship Line

A company that owns and operates ships used for shipping goods across oceans and seas.