Answer:
A. To keep banks with falling asset values solvent.
Explanation:
When a bank is failing it will result in loss of funds not only for the bank but also for customers that have accounts in these banks.
If a bank eventually closes operations as a result of insolvency, they will not be able to pay off the customers. That is where the deposit insurance comes in to settle customers.
The government will have to spend a lot of money reimbursing customers their money.
To avoid this the federal government ensures the capital of banks is maintained to keep banks with falling asset values solvent.
The process by which an increase in government borrowing results in less borrowing by businesses and consumers for private investment is called expansionary fiscal policy.
<h3>What Is Expansionary Fiscal Policy</h3>
Expansionary fiscal policy refers to an increament in government spending, a decrease in tax revenue, or a combination of the two.
Expansionary fiscal policy is aimed at spurring economic activity and drive development.
Learn more about Fiscal policy at brainly.com/question/6583917
