The Flat-Rate Insurance Provided by the FDIC Has Two Faults

question 13

Multiple Choice

The flat-rate insurance provided by the FDIC has two faults.First,it misprizes risk.Second,

• A) it penalizes large thrifts by making them subsidize smaller ones by paying the same rate
• B) it forces conservatively managed thrifts to subsidize those with more risky investments
• C) it is not adjustable to reflect the actual market conditions that are met by commercial financial institutions
• D) the rates are too high to be paid by a thrift without a large number of depositors

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Definitions:

Carbon And Glass Fibres

Strong, lightweight materials used in composites for a variety of applications, including automotive parts, sporting goods, and aerospace components.

Depletion Time

The amount of time it takes to fully use up a particular natural resource at the current rate of consumption.

Recycling Measures

Actions and processes dedicated to collecting, processing, and converting waste materials into new products, reducing the need for raw materials and minimizing waste.

Mining

The extraction of valuable minerals or other geological materials from the Earth.