5
AssignmentMultiple Choice

Banking

Question 5 • 2102371-Personal Finance and Money Management - Edgenuity Teacher

What causes a bank run?

Answer
A
Too many people try to withdraw their deposits at the same time.
B
Banks refuse to loan out deposited funds.
C
The Federal Reserve conducts an inspection of a bank’s fractional reserve.
D
Interest rates fall too quickly.

Explanation

A bank run happens when many depositors become worried about a bank and try to withdraw their money at the same time. Banks keep only some deposits readily available as cash, so a sudden rush of withdrawals can leave the bank unable to meet everyone’s requests. Therefore, the correct choice is “Too many people try to withdraw their deposits at the same time.”

AI-written and checked against the verified answer.

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