If People Speculate That a Run on One Bank Will

question 251

Multiple Choice

If people speculate that a run on one bank will cause a run on all banks in the financial system,and this speculation proves accurate,then the financial system would experience what is known as a

• A)commodity crisis.
• B)securitization meltdown.
• C)bank panic.
• D)institutional death spiral.

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Definitions:

Communication Networks

The methods and pathways through which information flows within an organization or group, influencing efficiency and effectiveness.

Majority Rule

A decision-making principle where the preferences of more than half of the members of a group determine the decision made by that group.

Groupthink

A phenomenon in which the desire for harmony or conformity in a group results in an incorrect or deviant decision-making outcome.

Cohesive Groups

Cohesive groups are characterized by strong bonds and a sense of unity among members, often leading to higher levels of group satisfaction and effectiveness.