Which of the following was an effect of bank runs in the United States during the Great Depression?
A) Banks, fearing runs, stopped lending their excess reserves, aggravating a fall in the money supply.
B) An institution called Federal Deposit Insurance Corporation was set up to assist banks during runs.
C) The government eased regulations to make it easier for savings and loans to compete for deposits with other financial institutions in the national market so that runs could be fought.
D) There was a fall in housing prices causing many financial institutions to falter.
E) There was a stock market decline doubled with the problem of high leveraging of financial institutions.
Correct Answer:
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