The federal deposit insurance corporation (FDIC) insures individual bank accounts up to $250,000 per account. Which of the following statements regarding FDIC insurance is true? FDIC insurance a. does not eliminate the need for reserve requirements because bank runs can't be eliminated in a fractional reserve banking system b. has prevented bank runs because the FDIC pays depositors interest at the discount rate on their accounts c. eliminates the need for reserve requirements because banks are not liable for any depositor losses d. works in coordination with reserve requirements to ensure depositor confidence, preventing bank runs.
The federal deposit insurance corporation (FDIC) insures individual bank accounts up to $250,000 per account. Which of the following statements regarding FDIC insurance is true? FDIC insurance a. does not eliminate the need for reserve requirements because bank runs can't be eliminated in a fractional reserve banking system b. has prevented bank runs because the FDIC pays depositors interest at the discount rate on their accounts c. eliminates the need for reserve requirements because banks are not liable for any depositor losses d. works in coordination with reserve requirements to ensure depositor confidence, preventing bank runs.
Chapter14: Banking And The Money Supply
Section: Chapter Questions
Problem 2.3P
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15. The federal deposit insurance corporation (FDIC) insures individual bank accounts up to $250,000 per account. Which of the following statements regarding FDIC insurance is true?
FDIC insurance
a. does not eliminate the need for reserve requirements because bank runs can't be eliminated in a fractional reserve banking system
b. has prevented bank runs because the FDIC pays depositors interest at the discount rate on their accounts
c. eliminates the need for reserve requirements because banks are not liable for any depositor losses
d. works in coordination with reserve requirements to ensure depositor confidence, preventing bank runs.
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