All of the following are associated with contagious runs except:
A)liability holders not distinguishing between good and bad FIs
B)liability holders seeking to quickly turn their liabilities into cash or safe securities
C)a contractionary effect on the supply of credit and negative social welfare effects
D)an expansionary effect on the money supply

Question

Quizplus · Accepted Answer

Contagious runs are characterized by liability holders seeking to quickly turn their liabilities into cash or safe securities, which can lead to a contractionary effect on the supply of credit and negative social welfare effects. However, they do not have an expansionary effect on the money supply. Therefore, choice D is not associated with contagious runs.

All of the Following Are Associated with Contagious Runs Except