During the banking crisis of the 1930s, the Federal Reserve:
A)ended the crisis by acting aggressively as a lender of last resort.
B)rushed to guarantee the liabilities of failing banks.
C)was established to resolve the banking crisis.
D)had the legal ability to act as a lender of last resort but failed to do so.

Question

Quizplus · Accepted Answer

The Federal Reserve had the legal ability to act as a lender of last resort during the 1930s banking crisis but failed to do so effectively, which contributed to the severity of the crisis.

During the Banking Crisis of the 1930s, the Federal Reserve