A Bank Run Is an Episode in Which

question 64

Multiple Choice

A bank run is an episode in which

• A) depositors,spurred by news or rumours of the possible bankruptcy of multiple banks,rush to withdraw deposits from the banking system.
• B) depositors,spurred by news or rumours of the possible bankruptcy of a particular bank,rush to withdraw deposits from that bank.
• C) commercial banks,concerned about high interest rates,rush to borrow from the overnight market.
• D) depositors,afraid of increasing interest rates,attempt to engage in borrowing from the Bank of Canada.
• E) the Bank of Canada,concerned about unusually rapid increases in the money supply,refuses to make loans to commercial banks.

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Definitions:

Short-Term Memory

Short-term memory is a cognitive system that temporarily holds a limited amount of information in an active, readily available state for a short period of time, typically seconds to a few minutes.

Long-Term Memory

The phase of the memory process that is capable of storing information for prolonged periods of time, potentially indefinitely.

Implicit Memories

Memories that are not part of our consciousness, formed from behaviors learned through repetitive practice, such as riding a bike, and not consciously recalled.

Automatically Processed

Pertains to cognitive actions that occur without conscious awareness or effort, often based on learned routines or patterns.