Which of the following describe a common cause of bank panics? Check all that apply.  1. Potential buyers of the assets of a bank, incorrectly rumored to be distressed, may suspect the assets to

Principles of Macroeconomics (MindTap Course List)
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Author:N. Gregory Mankiw
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Chapter16: The Monetary System
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Ques-1 Which of the following describe a common cause of bank panics? Check all that apply.
 1. Potential buyers of the assets of a bank, incorrectly rumored to be distressed, may suspect the assets to be of poor quality.
 
2. Bank regulators are bureaucrats who do not keep up with real-world banking issues.
 
3. A run on a given bank is often contagious and spreads to other financial institutions.
 
 
QUES 2-Which of the following are reasons why bank panics were largely eliminated after 1933? Check all that apply.
1. The Fed and other government agencies continuously monitor the financial condition of banks.
 
2. The Federal Reserve ("the Fed") stands ready to inject reserves into the system more quickly in a crisis.
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