When a Bank Experiences a Bank Run, It May Have

question 5

Multiple Choice

When a bank experiences a bank run, it may have to:

• A) print money to cover deposits.
• B) pay a higher insurance premium.
• C) offer depositors an IOU.
• D) call in its loans.
• E) increase its reserves.

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Definitions:

Necessities

Goods and services that are essential for survival, such as food, shelter, and healthcare, often characterized by inelastic demand.

Luxuries

Goods or services that are considered non-essential but are desired for their ability to provide comfort, convenience, or pleasure.

Elasticity Of Supply

A measure of how much the quantity supplied of a good responds to a change in the price of that good.

Inputs

Resources used in the production process, including labor, capital, materials, and energy.