One lesson learned from the bank panics of the early 1930's is:
A) the lender of last resort function almost guarantees that bank panics are a thing of the past.
B) the mere existence of a lender of last resort will not keep the financial system from collapsing.
C) only the U.S. Treasury can be a true lender of last resort.
D) the financial system will collapse without a lender of last resort.

Question

Quizplus · Accepted Answer

The bank panics of the early 1930s showed that the mere existence of a lender of last resort, such as the Federal Reserve, does not guarantee the stability of the financial system. The Fed's actions during this period were not effective in stopping the bank runs and widespread failures that occurred. This lesson highlights the need for effective regulation and intervention during times of crisis to prevent financial collapse.

One Lesson Learned from the Bank Panics of the Early