Why do bank runs usually have people rushing to their bank instead of waiting for the lines to taper off so they do not have to wait so long?
What will be an ideal response?
Banks promise to satisfy depositors' withdrawal requests on a first-come-first-served basis. As a result, people thinking the bank has limited cash (which is usually true) want to get theirs before the bank runs out and so rush to the bank to be first in line.
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Agave, Six Feet Under, Globe, Silk, Sotto Sotto and Zocalo are all restaurants in Atlanta. In the long run, Globe could I. make a positive economic profit. II. make zero economic profit. III. incur an economic loss
A) Only I B) Only II C) I, II, and III D) Only I and II
Assume that the Federal Reserve has purchased a $1,000 security from an individual, the required reserve ratio is 20 percent, and that individual deposits the proceeds in his bank. What is the increase in excess reserves for this bank?
a. $200 b. $1,000 c. $1,200 d. $800 e. $2,000
The optimal level of resource use comes when
a. MRP exceeds input price. b. MRP is less than input price. c. MRP equals input price. d. use of the resource exhausts the producer's funds.
Rumors of a bank failing, even if not true, can become a self-fulfilling prophecy because:
A. depositors will rush to the bank to withdraw their deposits and the bank under normal situations would not have sufficient liquid assets on hand. B. regulators will scrutinize the bank heavily looking for something wrong. C. customers will not want to obtain loans from this bank. D. equity investors will not be able to sell the bank's stock.