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Even a rumour of negative net worth could destroy a bank that is otherwise:
AHistoric
BHousehold
CHesitant
DHealthy
Answer & Solution
Correct answer: D. Healthy
1. Depositors withdraw at the first hint of trouble.
2. No bank holds every deposit in cash.
3. So even a healthy bank could be destroyed.
_Source: OpenStax Principles of Economics 3e, Chapter 28, Monetary Policy and Bank Regulation._
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