INTER WAR YEARS 1919 TO 1939
THE GREAT DEPRESSION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Social Security Administration
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Federal Deposit Insurance Corporation
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Federal Reserve
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United States Congress
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Detailed explanation-1: -The Federal Reserve failed to prevent the collapse of the banking system. High tariffs strangled international trade.
Detailed explanation-2: -The market crash weakened the nation’s banks in two ways. First, by 1929, banks had lent billions to stock speculators. Second, many banks had invested depositors’ money in the stock market, hoping for high returns.
Detailed explanation-3: -In addition to allowing the panics to reduce the U.S. money supply, the Federal Reserve also deliberately contracted the money supply and raised interest rates in September 1931, when Britain was forced off the gold standard and investors feared that the United States would devalue as well.
Detailed explanation-4: -What was one result of the Federal Reserve’s failure to prevent the collapse of the banking system prior to the Great Depression? The money supply contracted.