Which two strategies has Congress put in place to protect against bank runs?
AInsurance and last minute auditing
BInspection and last resort lending
CInspection and last minute auditing
DInsurance and last resort lending
Answer & Solution
Correct answer: D. Insurance and last resort lending
1. A bank run can destroy a solvent bank.
2. Two defences are named against that risk.
3. Congress has put deposit insurance and the lender of last resort into place.
4. So the pair is insurance and last resort lending.
_Source: OpenStax Principles of Macroeconomics 3e (CC BY 4.0), Ch 15 'Monetary Policy and Bank Regulation', sections 15.1-15.5_
Keep practising Monetary Policy and Bank Regulation
Browse all Monetary Policy and Bank Regulation questions for AP Macroeconomics, or explore more Economics topics.