A bank run is said to have occurred when
A) depositors realise that a particular bank is paying higher interest than its competitors and a substantial number of them rush to deposit their money in it.
B) a substantial number of depositors suspect that a bank may go bankrupt and withdraw their deposits.
C) a bank experiences a series of defaults on its loans.
D) a bank converts its loans into deposits.

Question

Quizplus · Accepted Answer

A bank run occurs when a substantial number of depositors suspect that a bank may go bankrupt and withdraw their deposits. This can set off a chain reaction, as more and more depositors withdraw their funds, leading to the bank's inability to meet withdrawal requests and potentially causing the bank to fail.

A Bank Run Is Said to Have Occurred When