Why does the fdic place a limit on the amount of money it will insure?
a.
the fdic has only limited reserves.
b.
limiting the amount of money insured encourages people with a large amount of money to spread their money out among different banks, which stimulates the economy.
c.
the fdic believes that insuring too much money encourages reckless investing.
d.
the limit prevents the money used to replace lost deposits from being taxed.

b.  Limiting the amount of money insured encourages people with a large amount of money to spread their money out among different banks, which stimulates the economy.

Explanation:

The FDIC is an agency of the US government that provides a protection to  deposits that are in a bank insured by the FDIC in case it fails. This covers the deposits up to $250.000 per depositor, per bank, per product category. This means that if you have a higher amount in one account in one bank, it will only cover up to $250.000, but if you have that amount divided, for example, in two banks you would be able to receive a coverage up to $500.000. According to this, the limit placed by the FDIC on the amount of money it will insure encourages people with a large amount of money to spread their money out among different banks.

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