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Question
how was the federal deposit insurance corporation meant to prevent another depression?
a. by making bank robberies less likely
b. by preventing stock prices from crashing
c. by preventing bank runs
d. by making banking more profitable
The Federal Deposit Insurance Corporation (FDIC) was created to insure deposits in banks. Bank runs occur when a large number of depositors withdraw their money simultaneously, often due to fear of bank failure. By insuring deposits (up to a certain amount), the FDIC gives depositors confidence that their money is safe. This reduces the likelihood of panic - driven bank runs. Bank robberies (Option A) are criminal acts and not the main economic concern the FDIC was meant to address. The FDIC does not directly prevent stock - price crashes (Option B), which are related to the stock market. Its purpose is not to make banking more profitable (Option D) but to ensure stability through deposit insurance.
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C. By preventing bank runs