A Run on a Bank May Occur If

question 63

Multiple Choice

A run on a bank may occur if

• A)depositors withdraw some funds to invest in the stock market.
• B)required reserves are increased.
• C)interest rates are raised.
• D)depositors lose confidence in the bank and attempt to withdraw all their funds.
• E)All of the above are correct.

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Definitions:

Stocks

Shares of ownership in a company that entitle the holder to a claim on part of the company’s assets and earnings.

Present Value

The current-day worth of an anticipated future money amount or cash flow sequences, calculated using a particular rate of return.

Received

Refers to any amount of money received by a party or business, usually in the context of payments for goods or services.

Annually

Pertaining to an event or activity that occurs once every year.