Today,bank runs are
A)uncommon because of the high reserve requirement.
B)uncommon because of FDIC deposit insurance.
C)common because of the low reserve requirement.
D)common because the FDIC is nearly bankrupt.

Question

Quizplus · Accepted Answer

Bank runs are uncommon because of FDIC deposit insurance which guarantees deposits up to $250,000 per depositor. This creates a sense of security for depositors and reduces the likelihood of a bank run occurring. The high reserve requirement also contributes to reducing the risk of bank runs as banks are required to hold a certain percentage of their deposits in reserve. Option A and C are incorrect because they are incomplete and incorrect statements respectively. Option D is incorrect because the FDIC is well-funded and has adequate reserves to handle bank failures.

Today,bank Runs Are