Depositors Have a Strong Incentive to Show Up First to Withdraw

question 33

Multiple Choice

Depositors have a strong incentive to show up first to withdraw their funds during a bank crisis because banks operate on a

• A)last-in,first-out constraint.
• B)sequential service constraint.
• C)double-coincidence of wants constraint.
• D)everyone-shares-equally constraint.

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Definitions:

Missouri Compromise Line

A political agreement in 1820 that allowed Missouri to enter the Union as a slave state and Maine as a free state, maintaining a balance between free and slave states.

John Crittenden

A U.S. politician known for the Crittenden Compromise, an unsuccessful proposal aimed at resolving the secession crisis that led to the Civil War.

Forty-Ninth Parallel

The latitude line that primarily forms the boundary between the United States and Canada, stretching from the Atlantic to the Pacific.

Oregon

A U.S. state located in the Pacific Northwest, renowned for its varied terrain that includes forests, mountains, agricultural lands, and urban areas.