Which of the Following Contributed the Least to the Collapse

question 17

Multiple Choice

Which of the following contributed the least to the collapse of the FSLIC/FDIC deposit insurance funds?

• A)An increase in interest rate volatility.
• B)Enhanced investment powers granted to thrifts.
• C)Fraudulent behavior induced by the greed of the decade of the 80s.
• D)Fraudulent behavior induced by ineffective regulatory incentives.
• E)The extension of deposit insurance to uninsured depositors.

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Definitions:

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Circular-Flow Diagram

An economic model that illustrates how money moves through society and the economy, from households to businesses and then back again.

Economy

An organized system of production, distribution, and consumption of goods and services within a geographical area.

Circular-Flow Diagram

A model that illustrates the movement of goods and services and money between households and businesses in the economy.