A bank run is an episode in which
A) depositors,spurred by news or rumours of the possible bankruptcy of multiple banks,rush to withdraw deposits from the banking system.
B) depositors,spurred by news or rumours of the possible bankruptcy of a particular bank,rush to withdraw deposits from that bank.
C) commercial banks,concerned about high interest rates,rush to borrow from the overnight market.
D) depositors,afraid of increasing interest rates,attempt to engage in borrowing from the Bank of Canada.
E) the Bank of Canada,concerned about unusually rapid increases in the money supply,refuses to make loans to commercial banks.

Question

Quizplus · Accepted Answer

A bank run occurs when depositors become fearful of a bank's financial health and rush to withdraw their funds. This is usually triggered by news or rumours of the possible bankruptcy of a particular bank, leading to a mass withdrawal of deposits. Option A is not entirely correct as the bank run can happen to a single bank rather than multiple banks. The other options are not related to the concept of a bank run.

A Bank Run Is an Episode in Which