Which of the Following Is NOT a Social Welfare Effect

question 9

Multiple Choice

Which of the following is NOT a social welfare effect of bank runs?

• A)Discipline of incompetent managers.
• B)Negatively affecting the payments function of DIs.
• C)Reduced availability of credit.
• D)Potential decrease in the money supply.
• E)Inability to perform intergenerational wealth transfers.

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Definitions:

Indemnity

A contractual obligation of one party to compensate the loss incurred by the other party.

Guarantor

An individual or entity that promises to pay a borrower's debt if the borrower fails to fulfill their financial obligations.

Debtor

An individual or entity that owes a debt to another.

Responsibility

The state or fact of having a duty to deal with something or of having control over someone; a moral obligation to behave correctly towards or in respect of.