Question

What did the Federal Reserve System do during the Great Depression that contributed to the severity of the issues faced by the nation?

a) It lowered interest rates to stimulate borrowing and investment.
b) It implemented policies to ensure economic stability.
c) It failed to provide adequate banking support and prevent bank failures.
d) It increased the money supply to boost the economy.

Answer 1

The Federal Reserve System's failure to provide adequate banking support and prevent bank failures contributed to the severity of the issues faced by the nation during the Great Depression.

Step-by-step explanation:

During the Great Depression, the Federal Reserve System failed to provide adequate banking support and prevent bank failures, which contributed to the severity of the issues faced by the nation. The Federal Reserve Act of 1913 created the Federal Reserve and twelve district banks to regulate the banking system and provide stability. However, during the Great Depression, a large number of banks failed, leading to the loss of depositors' money and creating panic in the financial markets. This lack of banking support worsened the economic downturn.