If the FDIC Eliminated Its Insurance Program for Deposits, Then

question 45

Multiple Choice

If the FDIC 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.

---

Definitions:

Fahrenheit

A temperature scale in which water freezes at 32 degrees and boils at 212 degrees under standard atmospheric conditions.

Infrared Energy

Infrared Energy refers to a type of light energy invisible to the human eye, characterized by longer wavelengths than visible light, widely used in heating, night vision devices, and medical imaging.

Bradycardia

A slow heart rate; usually less than 60 beats per minute.