In the Diamond-Dybvig Model, a Bank Run Occurs When

question 28

Multiple Choice

In the Diamond-Dybvig model, a bank run occurs when

• A)depositors see other depositors running on other banks.
• B)depositors think the central bank cannot be trusted.
• C)the banks suspends payments.
• D)depositors think that everyone else will request withdrawal.
• E)depositors think the bank managers have absconded with the bank's assets.

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Definitions:

Enacted Norm

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