To offset the moral hazard problem created by the FDIC, the government:
A)created securities to spread the risks.
B)created the Federal Reserve Bank.
C)separated banks from other financial institutions.
D)required individuals to pay a portion of the insurance costs.

Question

Quizplus · Accepted Answer

The government separated banks from other financial institutions to offset the moral hazard problem created by the FDIC, aiming to reduce risky behaviors by ensuring that banks couldn't engage in certain high-risk investments or operations that other financial institutions could.

To Offset the Moral Hazard Problem Created by the FDIC