While Deposit Insurance Was Designed to Make the Banking Industry

question 185

Multiple Choice

While deposit insurance was designed to make the banking industry more stable,it contributed to the banking crisis of the 1980s because

• A)the FDIC only insured commercial banks
• B)the ceiling on insured deposits was too low
• C)too many banks were not sufficiently insured
• D)depositors became too complacent about the risks that banks were taking
• E)unsafe banks were "kicked out" of the deposit insurance system

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Definitions:

Cardiovascular Disease

A group of disorders affecting the heart or the blood vessels, which encompasses conditions like coronary artery disease, hypertension, and stroke.

Set-Points

The theory that each person's body has a predetermined or natural weight that it seeks to maintain through various physiological mechanisms.

Genetics

The study of heredity and the variation of inherited characteristics.

Ethnicity

Shared cultural practices, perspectives, and distinctions that set apart one group of people from another, based on heritage, language, religion, and social experiences.