The concept of 'Moral Hazard' in the context of deposit insurance arises because:
A. Depositors monitor banks more intensively
B. Insurance always reduces risk-taking
C. Depositors become more careful about bank risk
D. Banks may take excessive risks knowing that deposits are insured
Answer: Option D
Solution (By JKSSB Mock Tests)
Deposit insurance can create moral hazard by reducing depositors’ incentive to monitor banks and by encouraging banks to take greater risks because the downside is partly borne by the insurer.
Explanation:
Multi-sided platforms bring together two or more distinct customer groups that need each other and whose interactions are mediated by the platform; pricing and design must balance the interests of all sides.
Explanation:
Regional disparities in development and persistent unemployment (especially youth and disguised unemployment) remain significant challenges for the Indian economy.
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