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Banking and Money (Khan Academy)

The Fix That Creates the Next Problem

Insure the deposits and the bank runs stop. But now every bank borrows at the same price, whatever it does with the money.

19 min160 XP available5 challenges

Pick the best answer

Deposit insurance means the government pays you back if your bank fails. It does stop bank runs. Which side effect does the video think is more serious?

Answer to continue.