In the U.S.economy,a major deterrent to bank runs is
A) the fact that most banks keep 50 percent of their deposits as reserves.
B) government ownership of commercial banks.
C) the stock of gold owned by the government.
D) the ability of commercial banks to create money when needed.
E) the FDIC.

Question

Quizplus · Accepted Answer

The FDIC (Federal Deposit Insurance Corporation) provides deposit insurance coverage to protect depositors in case of bank failures, which is a major deterrent to bank runs. This insurance coverage gives confidence to depositors that their money is safe, even if the bank fails, and therefore they are less likely to withdraw their money all at once, which can trigger a bank run.

In the USEconomy,a Major Deterrent to Bank Runs Is