PT7.S4.Q6 - Insurance for individuals' bank deposits

isdmyungisdmyung Member
edited January 2021 in Logical Reasoning 121 karma

I do not understand at all what the correct AC C is trying to say and why it is correct. Stimulus says that the gov't makes the bank pay for a premium, but that depositors should instead pay the premium since they are the ones benefitting from the insurance. What does any of that have to do with interest rates?

Comments

  • Ashley2018-1Ashley2018-1 Alum Member
    edited January 2021 2249 karma

    The argument assumes the depositors aren't already bearing the costs of the insurance premium so by paying depositors lower interest rates on insured deposits than uninsured, they are already passing on the costs to the primary beneficiaries of the insurance.
    If you are still confused let me know

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