Question

As banks began to fail in the early months of the Great Depression, the Federal Reserve...

As banks began to fail in the early months of the Great Depression, the Federal Reserve

A

prevented bank failures by lending through the discount window;

B

moved swiftly to take the economy off the gold standard;

C

greatly expanded the money supply to increase liquidity;

D

allowed banks to fail

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Answer #1

Option D

The role of the federal reserve was controversial during the great depression because it was not able to increase the money supply timely. in fact data indicates that money supply did used during the great depression and many banks were allowed to fail. Total of 3000 banks failed during the decade of 1930.

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