.

Which of the following best completes the passage below? As long as savings accounts are protected by federal insurance, account holders will have no reason to assess the stability of a savings institution. Interest rates alone will dictate their choice of institution. To draw in more deposits, banks will need to provide the highest possible interest rates. And since offering higher rates can put a strain on the financial health of a bank, ______

Answer Choices

Correct answer marked below

(A) the federal government will likely need to set limits on interest rates

(B) deposit insurance may eventually cause the financial instability of several banks

Correct

(D) deposits will generally flow to the banks with the strongest financial positions

(E) bank revenues will likely increase to unprecedented levels

See the full step-by-step explanation

You can see the correct answer above. Sign in for free to unlock the complete worked solution.

Track your performance and improve

Get detailed analytics, unlock full explanations, and move up difficulty tiers as you practice.

Start for free Sign in

Explanation

Preview

Official Explanation

Official

To solve this problem, we need to analyze the implications of government-insured savings accounts. The passage states that because deposits are insured, depositors do not evaluate the financial strength of banks and will choose based solely on interest rates. This leads to banks offering higher rates, which can weaken their financial health. The correct completion…

Read the full explanation

Create free account Sign in

Comments

RokoMay 4, 2025

thankss

JacobJan 5, 2025

Great

SpencerNov 15, 2024

Thankss

RebeccaSep 21, 2024

thankss

What this question tests

What it tests

Whether you can complete the last sentence of an argument in a way that is logically consistent with it.

Common trap

Choosing an option that sounds plausible but contradicts the argument or introduces new information.