The Possibility That the Failure of One Bank Can Hasten

question 23

Multiple Choice

The possibility that the failure of one bank can hasten the failure of other banks is called the

• A) bank run effect.
• B) moral hazard effect.
• C) contagion effect.
• D) adverse selection effect.

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Definitions:

Hallucinates

The experience of sensing things that are not present in the external environment as if they are real, often a symptom in psychological disorders.

Sleep Attacks

Sudden and irresistible episodes of sleep occurring in disorders such as narcolepsy, characterized by excessive daytime sleepiness.

Animal Magnetism

A historical term referring to a supposed invisible natural force possessed by all living things, including humans, thought to affect health and disease.

Franz Mesmer

An 18th-century physician best known for developing what he called "animal magnetism" and what later became known as mesmerism, a precursor to hypnotism.