Runs on banks occur when
A) banks make an unusually high number of profitable loans.
B) depositors are confident that the bank will not go bankrupt.
C) many depositors attempt to withdraw their funds simultaneously.
D) banks keep 100 percent of their deposits on hand.

Question

Quizplus · Accepted Answer

Runs on banks occur when many depositors attempt to withdraw their funds simultaneously, leading to a shortage of cash reserves in the bank. This can happen due to widespread panic, loss of confidence in the bank's stability, or economic uncertainty.

Runs on Banks Occur When