The Reason That a Run on a Single Bank Can

question 107

Multiple Choice

The reason that a run on a single bank can turn into a bank panic that threatens the entire financial system is:

• A) information asymmetries.
• B) moral hazard.
• C) the lack of regulation.
• D) the increased reliance on web-based funds transfers.

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Definitions:

Tachycardia

A medical term for a heart rate that exceeds the normal resting rate, usually defined as a heart rate over 100 beats per minute in adults.

Digoxin

A medication used to treat heart conditions, such as heart failure and atrial fibrillation, by increasing the force of cardiac contractions.

Hypothyroid Disease

A condition where the thyroid gland is underactive, leading to a deficiency in thyroid hormones.

Hypercapnia

An elevated level of carbon dioxide (CO2) in the blood, typically indicative of respiratory failure or dysfunction.