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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Banks ran out of money and closed.
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Banks stop lending money for auto loans.
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The President declared that banks must close on Columbus Day.
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Banks began giving out free money.
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Detailed explanation-1: -Deposit insurance If a bank collapses, the FDIC allows a bank with high capital reserves to acquire the vulnerable bank, together with its customers. The customers can then access their deposits in the new bank. In the worst cases, the FDIC may auction the collapsed bank’s assets to pay back depositors.
Detailed explanation-2: -The 2008 financial crisis began with cheap credit and lax lending standards that fueled a housing bubble. When the bubble burst, the banks were left holding trillions of dollars of worthless investments in subprime mortgages. The Great Recession that followed cost many their jobs, their savings, and their homes.
Detailed explanation-3: -More specifically, a systemic banking crisis is a situation when a country’s corporate and financial sectors experience a large number of defaults and financial institutions and corporations face great difficulties repaying contracts on time.
Detailed explanation-4: -A bank failure is a rare event, but it can happen. If the bank fails, as long as it’s insured by the FDIC, your deposit will be covered up to $250, 000 per depositor per account.