Bank panics have often begun as a result of:
A) rumors only.
B) real economic events only.
C) both rumors and real economic events.
D) neither rumors nor economic events.

Question

Quizplus · Accepted Answer

Bank panics have often begun as a result of both rumors and real economic events. Rumors can spread quickly and cause depositors to panic and withdraw their funds, which can lead to a bank run. Real economic events such as a recession, a stock market crash, or a sudden increase in interest rates can also cause depositors to lose confidence in the banking system and withdraw their funds. Both factors can combine to create a bank panic.

Bank Panics Have Often Begun as a Result Of