If the CDIC Eliminated Its Insurance Program for Deposits,then

question 49

Multiple Choice

If the CDIC eliminated its insurance program for deposits,then

• A)the banking system would probably fail.
• B)individual depositors would have more incentive to ascertain the soundness and solvency of the bank.
• C)banks would probably hold fewer reserves.
• D)moral hazard would be increased.

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Definitions:

Ciliary Muscles

Muscle fibers in the eye that control the shape of the lens, enabling focusing on objects at different distances.

Suspensory Ligament

Fibrous tissues that connect organs or parts of organs to each other or to skeletal structures, often supporting or holding them in place.

Lens

A transparent structure inside the eye that focuses light rays onto the retina to create clear images.

Aqueous Humor

A clear fluid filling the space in the front of the eyeball between the lens and the cornea, involved in nutrient supply and intraocular pressure maintenance.