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:

Stress Hormone

Hormones that are released into the body in response to stress, including cortisol and adrenaline, which prepare the body for a fight or flight response.

Cortisol

A steroid hormone released by the adrenal glands in response to stress or low blood-glucose concentration; it plays an essential role in stress response, metabolism, and immune response.

Memory Interference

A phenomenon where one memory competes with or replaces another memory, often leading to forgetting or distorted recollections.

Anterograde Amnesia

The inability to form long-term memories of events occurring after a brain injury or brain surgery, although memories formed before the trauma are usually intact and short-term memory is unaffected.