Fire sales of assets have occurred when
A) There are insufficient liquid assets at banks to meet deposit withdrawals
B) Depositor runs on banks take place
C) The central bank's discount window is not available
D) All of the above

Question

Quizplus · Accepted Answer

Fire sales of assets can occur under all the given conditions: when banks lack liquid assets to meet deposit withdrawals, during depositor runs on banks, and when the central bank's discount window is unavailable. These situations force banks to sell assets quickly, often at reduced prices, to raise cash.

Fire Sales of Assets Have Occurred When