In the 1920s, the Federal Reserve Followed a Policy of _____

question 31

Multiple Choice

In the 1920s, the Federal Reserve followed a policy of _____ because it believed that the insolvent banks ____.

• A) letting insolvent banks fail; were too small to be profitable and were badly managed.
• B) bailing out insolvent banks; too big to be allowed to fail.
• C) letting insolvent banks fail; would be purchased by solvent banks anyway
• D) bailing out insolvent banks; this was what the Federal Reserve had been founded to do