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In the Diamond-Dybvig Model, the Bank's Deposit Contract Has the Following

Question 8

Multiple Choice

In the Diamond-Dybvig model, the bank's deposit contract has the following important features


A) it gives more consumption to early consumers than later consumers.
B) it implies that late consumers want to pose as early consumers.
C) it allows a bank depositor to withdraw currency.
D) it implies a bank run is prevented.
E) it insures depositors against the event that they consume early.

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