Which one of the following statements is true?
A) The savings and loan crisis of the 1990s was due to the big U.S. budget deficit.
B) Deposit insurance guarantees savings up to $1,000,000.
C) Savings and loan institutions were very profitable during the 1970s when there was high inflation.
D) Deposit insurance was created to prevent bank runs from occurring.

Question

Quizplus · Accepted Answer

Deposit insurance was created to prevent bank runs from occurring. This was done to ensure that people would not withdraw all their money from a bank at once, which could lead to the bank's collapse. The Federal Deposit Insurance Corporation (FDIC) was created in 1933 to provide insurance for bank deposits up to a certain amount.

Which One of the Following Statements Is True