In a bank run in the Diamond-Dybvig model, it is in any depositor's interest to request withdrawal of his or her deposit because
A) government intervention assures that this is optimal behaviour.
B) the bank suspends withdrawal.
C) this avoids the possibility of consuming zero.
D) this avoids the possibility of having one unit of consumption.
E) there are plenty of liquid assets to go around.
Correct Answer:
Verified
Q5: The phenomenon in which an insured individual
Q6: The Diamond-Dybvig model provides a rationale for
Q7: In Canada, the Canada Deposit Insurance Corporation
Q8: In the Diamond-Dybvig model, the bank's deposit
Q9: A stock in Microsoft is
A)more risky than
Q11: In the Diamond-Dybvig model
A)consumers are not risk
Q12: In the Diamond-Dybvig model, a bank run
Q13: Bank runs
A)were eliminated by the CDIC.
B)are a
Q14: The Diamond-Dybvig model provides an account of
A)lack
Q15: The founding of the Canada Deposit Insurance
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