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ice5192 ice5192
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6 years ago
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.
Textbook 
Macroeconomics, Canadian Edition

Macroeconomics, Canadian Edition


Edition: 5th
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Blade73Blade73
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6 years ago
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ice5192 Author
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6 years ago
Thanks for your help!!
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Correct Slight Smile TY
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Just got PERFECT on my quiz
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