Why did so many banks collapse at the beginning of the Great Depression?
A. Too many investors tried to open new accounts.
B. Too many depositors tried to withdraw their money all at once.
C. The stock market collapsed too slowly to collect on debts.
D. The Federal Reserve put too much money into circulation.
Answer (3)
The answer is B.Too many depositors tried to withdraw their money all at once
The answer is B too many depositors tried to withdraw their money all at once
The numerous bank collapses at the onset of the Great Depression were primarily due to depositors rushing to withdraw their savings simultaneously, leading to bank runs. This panic escalated as confidence in the banking system eroded, resulting in many banks failing due to insufficient cash reserves. Therefore, the correct answer is option B: too many depositors tried to withdraw their money all at once.
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