A Bank Run Is Unlikely to Occur in Canada Today

question 41

Multiple Choice

A bank run is unlikely to occur in Canada today because

• A)if necessary,the central bank can provide all the reserves that are necessary to avoid this situation.
• B)the commercial banks are required by law to maintain 100% of their deposits in cash.
• C)there is relatively little demand for cash at present.
• D)banking is done mostly electronically.
• E)the commercial banks hold enough government securities that are convertible into cash.

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Definitions:

Oil Prices

The cost per barrel of crude oil, which can fluctuate based on supply and demand factors, geopolitical events, and market speculation.

Traveler's Checks

Preprinted, fixed-amount checks designed to allow the person signing them to make an unconditional payment to someone else as a result of having paid the issuer for that privilege.

Debit Card

A payment card that deducts money directly from a consumer's checking account to pay for a purchase.

Credit Card

A payment card issued to users as a method of payment allowing the cardholder to borrow funds with which to pay for goods and services with the promise to pay back the lender.