Multiple Choice
In a bank run in the Diamond-Dybvig model, it is in any depositor's interest to request withdrawal of his or her deposit because
A) this avoids the possibility of consuming zero.
B) this avoids the possibility of having one unit of consumption.
C) government intervention assures that this is optimal behaviour.
D) there are plenty of liquid assets to go around.
E) the bank suspends withdrawal.
Correct Answer:

Verified
Correct Answer:
Verified
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