19-40 Critics of the Current FDIC Insurance Programs Often Argue

question 49

True/False

19-40 Critics of the current FDIC insurance programs often argue that only uninsured depositors have any incentive to discipline riskier banks.

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Definitions:

Perfect Substitutes

Goods or services that can be used in exactly the same way and are interchangeable in consumption or use.

Income Effect

The variation in a person's or an economy's earnings and its effect on the amount of a product or service that is requested.

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods.

Price

The anticipated sum of money, necessitated, or allocated in payment for something.