Why Was the Glass-Steagall Act a Key Piece of Legislation

question 78

Multiple Choice

Why was the Glass-Steagall Act a key piece of legislation?

• A) It took on the debt of commercial banks to ensure their solvency and financial health.
• B) It established a gold standard to shore up the strength of the American dollar.
• C) It banned commercial banks from involvement in buying and selling stocks, and set up the FDIC.
• D) It proved to be a temporary financial measure that did not survive beyond the Great Depression.
• E) It decreased the government's power over the financial system.

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Definitions:

Note Disclosure

An explanatory or descriptive information included within financial statements, usually providing details about the basis of preparation, accounting policies, and specifics of certain account balances.

Capitalize

The accounting practice of recording a cost or expense on the balance sheet for the purposes of delaying full recognition of the expense over time through depreciation or amortization.

Depreciate

To allocate the cost of a tangible asset over its useful life, reflecting the decline in the asset's value due to use and wear and tear.

Financial Statements

Reports that summarize the financial performance, position, and cash flows of a business over a specific period of time.