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Why Is It Unlikely That a Bank Run Will Occur

Question 15

Multiple Choice

Why is it unlikely that a bank run will occur in Canada today?


A) Because if necessary,the central bank can provide all the reserves that are necessary to avoid this situation.
B) Because the commercial banks are required by law to maintain 100% of their deposits in cash.
C) Because there is relatively little demand for cash at present.
D) Because banking is done mostly electronically.
E) Because the commercial banks hold enough government securities that are convertible into cash.

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