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:

Model Business Corporation Act (MBCA)

A set of laws proposed by legal experts to guide states in the establishment of their corporate statutes.

Quarterly Meeting

A scheduled meeting that occurs four times a year, typically to review quarterly performance and plan for future strategies.

Shareholders

Individuals or entities that own shares in a corporation and have potential financial gains or losses based on the company's performance.

Terminated Corporation

A terminated corporation is a company that has gone through the legal process of dissolution and has ceased its operations and its corporate existence.