Which of the following best describes bank runs today?
A)Bank runs are uncommon because of the high required reserve ratio.
B)Bank runs are uncommon because of CDIC deposit insurance.
C)Bank runs are common because of the low required reserve ratio.
D)Bank runs are common because the CDIC is inefficient.

Question

Quizplus · Accepted Answer

Bank runs are uncommon today because of the CDIC deposit insurance, which guarantees that individual deposits up to a certain amount are insured in case of a bank failure. This reduces the likelihood of depositors withdrawing their funds en masse in the event of a crisis.

Which of the Following Best Describes Bank Runs Today