Major economic crises such as the Great Depression of the 1930s, led to expansion of the Feds role in the U.S. banking system and with managing the U.S. economy.

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Major economic crises such as the Great Depression of the 1930’s, led to expansion of the Fed’s role in the U.S. banking system and with managing the U.S. economy.

A	true
B	false

Explanation:

Detailed explanation-1: -Causes of Great Depression Tight monetary policies adopted by the Central Bank of America. Stock market crash of 1929. The failure of banks, which was the impact of the stock market crash as more people withdrew their savings from the banks leading to closure. Reduction in purchases due to diminished savings.

Detailed explanation-2: -The Depression, set off by the October 1929 Wall Street stock market crash, hit the New South Wales economy with great severity. Unemployment, already high at 10% in mid 1929, was 21% by mid 1930 and rising, hitting almost 32% in mid-1932.

Detailed explanation-3: -The Depression Many of the small banks had lent large portions of their assets for stock market speculation and were virtually put out of business overnight when the market crashed. In all, 9, 000 banks failed–taking with them $7 billion in depositors’ assets.

Detailed explanation-4: -Illiquidity coupled with a contagion of fear is seen as the major factor in precipitating the financial crisis. A contagion of fear led to higher short-term demand for currency and further strained the liquidity of banks and as a result made them cash flow insolvent.

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