A Banking Panic Is an Episode in Which

Multiple Choice

A banking panic is an episode in which:

A) depositors, spurred by news or rumors of possible bankruptcy of one bank, rush to withdraw deposits from the banking system.
B) commercial banks, fearing Federal Reserve sanctions, unwillingly participate in open-market operations.
C) commercial banks, concerned about high interest rates, rush to borrow at the Federal Reserve discount rate.
D) depositors, afraid of increasing interest rates, attempt to engage in discount-window borrowing at the Federal Reserve.