If the Government Guarantees Liabilities of Financial Institutions Other Than

Multiple Choice

If the government guarantees liabilities of financial institutions other than deposits:

A) those financial institutions will have the incentive to engage in overly risky behavior.
B) those financial institutions will have the incentive to engage in less risky behavior.
C) the Federal Reserve will be forced to raise reserve requirements.
D) the economy will be pushed close to the zero bound on interest rates.