Question

What problems were created as more and more Americans removed their money from the banks? Check all of the boxes that apply.

Answer 1

large withdrawals of cash or gold from banks could reduce bank reserves to the point that banks would have to contract their outstanding loans, which would further reduce deposits and shrink the money stock. The money stock fell during the Great Depression primarily because of banking panics.

Answer 2

Answer: all of them are correct

Banks couldn’t survive if all of their customers withdrew their funds.

Banks were not required to hold enough cash to pay out everyone’s deposits.

This would have made the Depression worse.

Explanation: