Question

What statement is most true of the Federal Deposit Insurance Corporation?

A) It protects the money people put in their bank accounts.
B) It keeps investments in citizens' retirement plans from declining in value.
C) It provided subsidies to farmers in an effort to stabilize food prices.
D) It regulates big businesses and insurance companies.

Answer 1

A) It protects the money people put in their bank accounts is the most true of the FDIC. The FDIC provides insurance for bank deposits up to $250,000, ensuring that depositors do not lose their money if the bank goes bankrupt. This measure has bolstered confidence in the banking system and curtailed bank runs.

Step-by-step explanation:

The statement most true of the Federal Deposit Insurance Corporation (FDIC) is: A) It protects the money people put in their bank accounts. The FDIC is an insurance system established by Congress to ensure that depositors in a bank do not lose their money in the event of a bank failure. Banks pay an insurance premium to the FDIC, which is based on the bank's level of deposits and adjusted according to the riskiness of the bank's financial situation. As of 2008, the FDIC guarantees that depositors will receive up to $250,000 per account. This protection has effectively ended bank runs at insured banks since its enactment in the 1930s.