One of the Most Serious Effects of a Banking Panic

question 252

Multiple Choice

One of the most serious effects of a banking panic is that

• A) banks will not earn as much profit
• B) banks will no longer be trusted by the public
• C) people will not place their excess money in banking accounts
• D) people may lose any accrued interest on their accounts
• E) large withdrawals of cash lead to a severe decrease in reserves and ultimately in the money supply

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Definitions:

Hypochondriasis

A disorder characterized by an excessive preoccupation with and fear of having a serious illness, despite medical evaluation and reassurances.

Excessively

To a degree or extent that exceeds what is normal or permissible.

Doctors

Medical professionals who are licensed to diagnose and treat illnesses, perform surgery, and prescribe medication to patients.

Dopamine System

A complex network within the brain that's responsible for regulating pleasure, reward, and motivation, primarily through the neurotransmitter dopamine.