All of the Following Are Associated with Contagious Runs at DIs

question 35

Multiple Choice

All of the following are associated with contagious runs at DIs EXCEPT

• A)liability holders not distinguishing between good and bad FIs.
• B)liability holders seeking to quickly turn their liabilities into cash or safe securities.
• C)a contractionary effect on the supply of credit.
• D)negative social welfare effects.
• E)an expansionary effect on the regional money supply.

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Definitions:

Guarantee

A legal commitment to assume responsibility for another's fulfillment of an obligation if that party fails to do so themselves.

Indemnity

A contractual obligation of one party to compensate the loss incurred by the other party due to the acts of the indemnifier or other specified events.

Requirement of Writing

The requirement of writing specifies that certain agreements or contracts must be in written form to be legally binding and enforceable.

Mental Incapacity

A condition where an individual lacks the ability to make decisions because of mental health issues or intellectual disabilities.