Bank depositors in the United States are all financially protected against bank failure because the government insures all individuals' bank deposits. An economist argues that this insurance is partly responsible for the high rate of bank failures, since it removes from depositors any financial incentive to find out whether the bank that holds their money is secure against failure. If depositors were more selective.then banks would need to be secure in order to compete for depositors' money.
The economist's argument makes which of the following assumptions?
Bank depositors in the United States are allfinancially protected against bank failure because the government insures allindividuals' bank deposits. An economistargues that this insurance is partly responsible for the high rate of bankfailures, since it removes from depositors any financial incentive to find outwhether the bank that holds their money is secure against failure. If depositors were more selective, then bankswould need to be secure in order to compete for depositors' money.The economist's argument makes which of the following assumptions?
(A)Bank failures are caused when big borrowers default on loan repayments. (B)A significant proportion of depositors maintain accounts at several differentbanks. (C)The more a depositor has to deposit, the more careful he or she tends to be inselecting a bank. (D)The difference in the interest rates paid to depositors by different banks isnot a significant factor in bank failures. (E)Potential depositors are able to determine which banks are secure againstfailure.
原题的前提和和结论是,如果顾客多会选择银行,银行就会为顾客存的钱的安全考虑(If depositors were more selective, then bankswould need to be secure in order to compete for depositors' money.) A和D都是说failure的因素,在这里无论bank failure是什么原因,只要银行有竞争意识为顾客的存款考虑,就会用不管什么办法提高安全性,从而避免failure,因此failure的原因是无关选项。