Bank runs are a possibility because

Question

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Bank runs occur when depositors lose confidence in the banking system and rush to withdraw their deposits from banks. Banks are required to maintain a certain level of reserves to cover their deposit liabilities, but if they do not keep enough reserves, they may not be able to meet the demands of all depositors during a bank run. This can result in the bank failing and depositors losing their money. Therefore, the possibility of bank runs is related to the level of reserves banks keep to cover their liabilities.

Bank Runs Are a Possibility Because