Which of the Following Would Most Likely Reduce the Number

question 31

Multiple Choice

Which of the following would most likely reduce the number of bank failures?

• A)An increase in the number of small banks
• B)Deregulation of banks and other financial institutions
• C)Creating a system of deposit insurance
• D)Encouraging banks to make more risky loans
• E)A higher degree of leveraging

---

Definitions:

Subsidized

Referring to goods, services, or activities that receive financial support from the government or another organization to reduce costs and encourage consumption or production.

Command Economies

Economic systems where the government or central authority makes all decisions regarding the production and distribution of goods and services.

Corporation

A legal entity that is separate and distinct from its owners, which can own assets, incur liabilities, and sell securities, among other activities.

Independent Legal Entity

An organization that has legal rights and obligations independent of its members, such as the ability to enter contracts, sue, and be sued.