Practice question · Match the pairs
Match each Depression lesson to its institutional outcome.
- Bank runs destroy the payments system
- The Fed failed as lender of last resort
- Private demand can collapse catastrophically
- Tariffs transmit contraction globally
- Deposit insurance (FDIC)
- Keynesian fiscal stimulus
- Modern central banking doctrine
- Postwar free-trade institutions (GATT)
Hints
- Each institution was designed to prevent one specific failure.
- One answers bank runs directly.
Show the answer
- Bank runs destroy the payments system → Deposit insurance (FDIC)
- The Fed failed as lender of last resort → Modern central banking doctrine
- Private demand can collapse catastrophically → Keynesian fiscal stimulus
- Tariffs transmit contraction globally → Postwar free-trade institutions (GATT)
Why
Every major postwar economic institution was designed to prevent a repeat, deposit insurance, central bank activism, counter-cyclical fiscal policy, and trade agreements.
Practise The Great Depression
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