During the financial panic of the early 1930s
A)the public converted large amounts of currency to bank deposits.
B)the spread between interest rates on safe and risky securities widened sharply.
C)spending by large firms declined relative to spending by households and small firms.
D)banks shifted large amounts of funds from government securities to loans.

Question

Quizplus · Accepted Answer

During the financial panic of the early 1930s, the uncertainty and risk in the financial markets led to a sharp increase in the spread between interest rates on safe and risky securities. Investors demanded higher returns for taking on additional risk, leading to a wider spread.

During the Financial Panic of the Early 1930s