Which of the following statements is true?
A)In case of a liquidity crisis, depositors do not need to worry as the RBA will pay out any deficit balances.
B)In case of a liquidity crisis, any available balances will be divided equally among depositors.
C)In case of a liquidity crisis, any available balances will be divided proportionally to each depositor's investment.
D)In case of a liquidity crisis, the 'first comes, first served' principle holds.

Question

Quizplus · Accepted Answer

In case of a liquidity crisis, the 'first comes, first served' principle holds, meaning that depositors who withdraw their funds first will be able to access their full balance, while those who withdraw later may only receive a partial balance or no balance at all.

Which of the Following Statements Is True