Today,bank runs are
A)uncommon because of the high required reserve ratio.
B)uncommon because of FDIC deposit insurance.
C)common because of the low required reserve ratio.
D)common because the FDIC is nearly bankrupt.

Question

Quizplus · Accepted Answer

Bank runs are uncommon because of FDIC deposit insurance, which guarantees customers' deposits up to a certain amount. This reassures depositors that even if a bank becomes insolvent, they will not lose their money. The high required reserve ratio also contributes to the stability of the banking system by ensuring that banks hold a certain amount of funds in reserve to cover withdrawals. Additionally, the FDIC's reserves are currently at a healthy level, so choice D is incorrect.

Today,bank Runs Are