Which of the Following Has Been a Problem Faced by the FDIC

question 445

Multiple Choice

Which of the following has been a problem faced by the FDIC in its provision of federal deposit insurance?

• A) moral hazard arising from the tendency for the highest-risk banks to be those most interested in obtaining deposit insurance in the first place
• B) adverse selection arising from the tendency for banks to take on more risk after they receive deposit insurance
• C) moral hazard arising from the tendency for banks to take on more risk after they receive deposit insurance
• D) a relatively low number of bank failures each year, which has reduced the need for deposit insurance

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Definitions:

Bloodstream

The network of blood vessels through which blood circulates in the body.

Secreted

The process by which substances are produced and discharged from a cell, gland, or organ for a particular function in the organism or for excretion.

Parasympathetic Nervous System

A branch of the autonomic nervous system responsible for conservation of body's energy and restoring the body to a state of calm.

Somatic Nervous System

A part of the peripheral nervous system associated with the voluntary control of body movements through the action of skeletal muscles.