Suppose That Deposit Insurance Were Reduced to a Maximum of $50,000

question 37

Multiple Choice

Suppose that deposit insurance were reduced to a maximum of $50,000 per account (instead of $250,000) .This would address the specific market imperfection of

• A)externalities.
• B)imperfect information.
• C)rent seeking.
• D)moral hazard.

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Definitions:

Percentage

A proportion or share in relation to a whole, represented as a fraction of 100.

United States

A country located in North America, comprising 50 states, a federal district, and several territories, known for its significant economic and cultural influence globally.

Tax-transfer System

The governmental mechanism by which taxes are collected from individuals and businesses, and redistributed through spending programs, often targeting social welfare and public services.

Progressive

Relating to or advocating for progress, change, or improvement, as opposed to wishing to maintain the status quo.