A Bus Breaks Down Outside a Small Bank Causing a Big

question 7

Multiple Choice

A bus breaks down outside a small bank causing a big crowd.Passing bank customers think the crowd is caused by a queue of depositors withdrawing their money and so take their money out and warn their friends.You are also a depositor at the bank but realize that the run on the bank has been caused by a misconception.Your rational response is to

• A) ignore the run since it is based on a misconception
• B) withdraw your money also even though there is no risk of the bank failing
• C) withdraw your money as there is now a risk of the bank failing
• D) put more money in the bank as a show of confidence
• E) ignore the run even though the bank is now at risk of failing