Question

Do you think that eliminating or limiting the amount of deposit insurance would be a good​ idea? Explain your answer. A. It is a good idea. Eliminating or limiting the amount of deposit insurance would help increase the moral hazard of excessive risk taking on the part of banks.​ Moreover, it would make bank failures and panics less likely. B. It is not a good idea. Eliminating or limiting the amount of deposit insurance would help increase the moral hazard of excessive risk taking on the part of banks. It​ would, however, make bank failures and panics more likely. C. It is a good idea. Eliminating or limiting the amount of deposit insurance would help reduce the moral hazard of excessive risk taking on the part of banks.​ Moreover, it would make bank failures and panics less likely. D. It is not a good idea. Eliminating or limiting the amount of deposit insurance would help reduce the moral hazard of excessive risk taking on the part of banks. It​ would, however, make bank failures and panics more likely.

Answer 1

Answer:B. It's not a good idea. Eliminating or limiting the amount of deposit insurance would help increase the moral hazards of excessive risk taking on the parts of bank. It would however make banks failures and panics more likely.

Explanation:

The elimination would increase risk taken and bank failures, when there is no coverage for failures.