The Moral Hazard Problem Is Minimized When Deposit Insurance Premiums

question 61

Multiple Choice

The moral hazard problem is minimized when deposit insurance premiums are

• A)zero (not imposed by the FDIC).
• B)the same percentage of assets for all banks.
• C)set at a fixed percentage of assets for large banks, and is zero for small banks.
• D)set at a percentage of assets that is based on the bank's risk level.

Understand the role of expectancy theory in employee performance and motivation.

Recognize the impact of organizational culture and founder philosophies on performance-driven cultures.

Assess the significance and appropriateness of various sources for performance judgments, with a focus on supervisory roles.

Grasp the concepts and effectiveness of different performance appraisal methods and systems, including focal-point reviews and self-appraisals.

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Definitions:

Moral Development

The growth of an individual's understanding of the principles of right and wrong and the ability to apply these principles.

Preconventional Level

The first level of moral thinking in Kohlberg's theory, where moral reasoning is based primarily on external consequences to the individual.

Subsequent Punishment

is a behavior modification technique where a negative consequence follows an undesirable or unwanted behavior, intended to decrease its future occurrences.

Nervous System

The network of nerve cells and fibers that transmits nerve impulses between parts of the body, governing both voluntary actions and involuntary processes.