One of the key reasons that the Bank of Canada acts as a lender of last resort is to prevent ________,the process by which a run on one bank spreads to other banks,resulting in a bank panic.

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Contagion is the process by which a run on one bank spreads to other banks, creating a panic among depositors who rush to withdraw their funds. By acting as a lender of last resort, the Bank of Canada can provide liquidity to banks experiencing a run, preventing the panic from spreading to other banks and triggering a larger financial crisis.

One of the Key Reasons That the Bank of Canada