Question

50.52
Which best describes why the Federal Deposit Insurance Corporation (FDIC) was created?
O to reduce the number of bank runs
to secure money placed in banks
O to force failing banks to close
O to support recovery among banks
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Answer 1

Answer:

Option A is correct as the FDIC was created to secure money placed in banks.

Explanation:

This was primarily due to the bank’s failures that arose with the Great Depression. People lost so much of their deposited money because the banks provided loans to the many non reliable consumers.

FDIC now ensures that if something happens from bank’s side, the banks are required to keep a certain amount of amount as their reserve amount so that they can give money to its consumers when they required withdrawing.