THE GREAT DEPRESSION 1929 1940
THE GREAT DEPRESSION
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
After the Stock Market Crash of 1929, people began to lose their trust in farming reserves. As a result, small numbers of people withdrew their money from banks, leaving them empty and unable to function.
|
|
|
Employees were stealing money from national banks. After it was discovered that the thefts were an inside job, banks were forced to close until investigations were completed.
|
|
|
Too many banks were open, and not enough customers were using them, so they were forced to close.
|
|
|
After the Stock Market Crash of 1929, people began to lose their trust in banks. As a result, large numbers of people withdrew their money from banks, leaving them empty and unable to function.
|
Detailed explanation-1: -Many banks failed due to their dwindling cash reserves. This was in part due to the Federal Reserve lowering the limits of cash reserves that banks were traditionally required to hold in their vaults, as well as the fact that many banks invested in the stock market themselves.
Detailed explanation-2: -By then, production had already declined and unemployment had risen, leaving stocks in great excess of their real value. Among the other causes of the stock market crash of 1929 were low wages, the proliferation of debt, a struggling agricultural sector and an excess of large bank loans that could not be liquidated.
Detailed explanation-3: -A bank fails when it can’t meet its financial obligations to creditors and depositors. This could occur because the bank in question has become insolvent, or because it no longer has enough liquid assets to fulfill its payment obligations.
Detailed explanation-4: -The stock market crash of 1929 had a devastating effect on the culture of the 1930s. As investors, businesses, and farms lost money, they started to shutter and lay off workers. Banks closed as well. The Great Depression began in the 1930s, leading to soup kitchens, bread lines, and homelessness across the nation.