The Great Depression: Mastery Test

Select the correct answer.

Which statement best describes the US government's role with the banking industry at the beginning of the Depression?

A. Federal agencies forced banks to close if they could not insure all of their accounts.
B. The government passed laws to provide insurance on individual accounts.
C. Individual banks were inspected and supervised by agents of the government.
D. The government had little involvement with monitoring the health of banks.

The US government initially had little involvement with monitoring banks at the start of the Great Depression but later implemented crucial programs like the FDIC and SEC to stabilize the economy.

Explanation:

The US government's role with the banking industry at the beginning of the Great Depression was limited initially.

However, after the crisis, the government took actions such as providing more deposit insurance, decreasing interest rates, facilitating mergers, and bailing out institutions to stabilize the economy.

Key programs like the creation of the Federal Deposit Insurance Corporation (FDIC) and the Security and Exchange Commission (SEC) were put in place to restore confidence in the banking system and regulate financial activities.

Learn more about Government's Role in Banking during the Great Depression here:

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