14
AssignmentMultiple Choice

Banking

Question 14 • (Galli)WCA 2221 Civics/Economics 1st nine weeks 26-27

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 occurs when many depositors lose confidence in a bank and try to withdraw their money at the same time. Banks keep only a portion of deposits readily available, so they may not be able to meet all withdrawal requests at once. 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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