Banks in the Diamond-Dybvig model can offer depositors increased liquidity because
A) the bank only holds a small amount of illiquid assets.
B) both individual depositors' liquidity needs and average depositor liquidity needs are predictable.
C) neither individual depositors' liquidity needs nor average depositor liquidity needs are predictable.
D) while individual depositors' liquidity needs are unpredictable, average depositor liquidity needs are predictable.
E) while individual depositors' liquidity needs are predictable, average depositor liquidity needs are unpredictable.
Correct Answer:
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Q15: The founding of the Canada Deposit Insurance
Q16: In the Diamond-Dybvig model a bank run
Q17: The Diamond-Dybvig bank provides a useful social
Q18: In a bank run, the equilibrium deposit
Q19: A bank
A)cannot be regulated.
B)is essentially the same
Q21: One characteristic of a financial intermediary is
Q22: A depository institution can make highly illiquid
Q23: Examples of financial intermediaries include
A)mutual funds.
B)stock exchanges.
C)financial
Q24: What is the role of deposit insurance,
Q25: An asset's liquidity depends upon
A)how long it
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