Which of the Following Best Explains Whether Bank Runs Are

question 133

Multiple Choice

Which of the following best explains whether bank runs are a problem for the economy?

• A)They are not a problem, because bank runs will affect neither the money supply nor the money multiplier.
• B)Bank runs are only a problem for insolvent banks.
• C)They are a problem, but they can be neither prevented nor stopped by a central bank.
• D)Bank runs are a problem because bank failures may spread to healthy banks.

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Definitions:

International Debt

Refers to the total amount of debt that countries owe to external creditors, including international banks, governments, or financial institutions.

Anti-globalization

A movement or sentiment against the process of international integration arising from the interchange of world views, products, ideas, and other aspects of culture.

Glocalization

The process of reflecting and adapting global practices to fit local needs, customs, and environments, blending global and local perspectives.

Modernization Theory

A theory suggesting that societies progress through similar stages of development towards becoming modern societies, characterized by industrialization, urbanization, and increased living standards.