When depositors lose confidence in a bank there is a(n) _ , and the bank faces a .
A)bank surge; credit shortcoming
B)contagion; credit tightening
C)bank run; liquidity crisis
D)increase in vault cash; reduction in its credit rating

Question

Quizplus · Accepted Answer

When depositors lose confidence in a bank, they may rush to withdraw their money all at once, causing a bank run. This can lead to a liquidity crisis for the bank, as they may not have enough cash on hand to meet all of the withdrawal demands.

When Depositors Lose Confidence in a Bank There Is A(n)