THE GREAT DEPRESSION 1929 1940
THE GREAT DEPRESSION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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People were rushing to deposit their money
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People were rushing to take out their money
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Banks went on vacation
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People were taking out a bunch of credit cards
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Detailed explanation-1: -Banks lost millions and, in response, foreclosed on business and personal loans, which in turn pressured customers to pay back their loans, whether or not they had the cash. As the pressure mounted on individuals, the effects of the crash continued to spread.
Detailed explanation-2: -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-3: -A bank run or run on the bank occurs when many clients withdraw their money from a bank, because they believe the bank may cease to function in the near future.
Detailed explanation-4: -The run on America’s banks began immediately following the stock market crash of 1929. Overnight, hundreds of thousands of customers began to withdraw their deposits. With no money to lend and loans going sour as businesses and farmers went belly up, the American banking crisis deepened.