Question

Why do banks depend on the deposits of account holders? And how does lending money to stockbrokers lead to a major problem at the end of the 1920s?

Answer 1

A commercial bank is a financial institution that grants loans, accepts deposits, and offers basic financial products such as savings accounts and certificates of deposit to individuals and businesses. It makes money primarily by providing different types of loans to customers and charging interest.

The role that the central bank—the Federal Reserve System—and its managers played in the catastrophe of the 1920s and 1930s is largely unknown and therefore unappreciated. Other observers, for example, many Austrian economists, believe that all the trouble started with a central bank “inflation” in the 1920s.

Step-by-step explanation:

(i answerd quickly because i had the same assiment!)

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