Economics · Money and Banking
Which of the following statements correctly describes the term 'bank run'?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The period in which commercial banks create the highest credit in the market.
- 2The ratio of a bank's total deposits and liabilities maintained by commercial banks is very low.
- 3A panic situation created when large numbers of depositors start withdrawing cash simultaneously from banks.✓
- 4Bondholders and depositors both suffer due to increased inflation.
Correct answer
A panic situation created when large numbers of depositors start withdrawing cash simultaneously from banks.
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