What is one of the potential hazards of the government’s move to insure bank deposits?
a. People are less likely to apply for loans.
b. Depositors are more likely to engage in bank runs.
c. Banks are willing to take greater risks.
d. The money supply may be less stable.
c. Banks are willing to take greater risks.
You might also like to view...
Which of the following would NOT cause the demand curve for bonds to shift?
A) a change in wealth B) a change in the price of bonds C) a change in the liquidity of bonds D) a change in expected inflation
If a firm doesn't make an economic profit, it will shut down
Indicate whether the statement is true or false
A fiduciary monetary standard exists when the value of a currency
A) is determined by law. B) is convertible to a fixed quantity of gold. C) depends upon the public's confidence that the currency can be exchanged for goods and services. D) increases with inflation.
Suppose that for a given good demand increases and supply increases at the same time. If demand increases by a lesser amount than supply increases, then equilibrium price __________ and equilibrium quantity __________ for that good
A) rises; falls B) falls; falls C) rises; rises D) falls; rises