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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Bank Runs
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Black Tuesday
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Stock Market Crash
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New Deal
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Detailed explanation-1: -Bank runs happen when a large number of people start making withdrawals from banks because they fear the institutions will run out of money. A bank run is typically the result of panic rather than true insolvency.
Detailed explanation-2: -Although only a small percentage of Americans had invested in the stock market, the crash affected everyone. 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.
Detailed explanation-3: -A run on a bank occurs when a large number of depositors, fearing that their bank will be unable to repay their deposits in full and on time, simultaneously try to withdraw their funds immediately.
Detailed explanation-4: -Due to a cash shortage, banks were forced to liquidate loans and sell assets at rock-bottom prices to supplement the mass withdrawals.
Detailed explanation-5: -A bank failure is the closing of an insolvent bank by a federal or state regulator.