The Existence of the Federal Deposit Insurance Corporation (FDIC)

Multiple Choice

The existence of the Federal Deposit Insurance Corporation (FDIC)

A) increases the risk of moral hazard in the savings and loan industry.
B) reduces the risk of moral hazard in the savings and loan industry.
C) increases the risk that customers of savings and loans will engage in moral hazard, but reduces the risk that the lenders will engage in moral hazard.
D) reduces the risk that customers of savings and loans will engage in moral hazard, but increases the risk that the lenders will engage in moral hazard.