In the Diamond-Dybvig Model, the Bank's Deposit Contract Has the Following

question 49

Multiple Choice

In the Diamond-Dybvig model, the bank's deposit contract has the following important features:

• A) it allows a bank depositor to withdraw currency.
• B) it insures depositors against the event that they consume early.
• C) it implies that late consumers want to pose as early consumers.
• D) it implies a bank run is prevented.
• E) it gives more consumption to early consumers than later consumers.

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Definitions:

Single Family

A term typically referring to a household consisting of one set of parents and their biological or adopted children living in a single dwelling.

Consultant

A professional who provides expert advice in a particular area or specialized field to improve client outcomes.

Role

A set of expectations or functions associated with a particular position or status within a group or society.

Spokesperson

A spokesperson is an individual appointed or designated to speak on behalf of an organization, group, or another person, particularly to the media or public.