Which of the following is a result of the Banking Act of 1935?(1 point)

Question

Which of the following is a result of the Banking Act of 1935?(1 point)

Responses

The United States dollar can be exchanged for a fixed quantity of gold.
The United States dollar can be exchanged for a fixed quantity of gold.

Depositor funds are insured against potential loss in the event of a bank failure.
Depositor funds are insured against potential loss in the event of a bank failure.

Banks are required to keep the full amount of every deposit made in their vaults.
Banks are required to keep the full amount of every deposit made in their vaults.

Commercial and investment banking practices are strictly separated by law.

Answer 1

Commercial and investment banking practices are strictly separated by law.

Answer 2

The correct answer is:

Depositor funds are insured against potential loss in the event of a bank failure.

Answer 3

The result of the Banking Act of 1935 was that depositor funds are insured against potential loss in the event of a bank failure. This means that if a bank were to fail, depositors would be protected and would not lose their money. This was enacted to increase confidence in the banking system and prevent bank runs, where depositors would rush to withdraw their money in fear of a bank failure. The act created the Federal Deposit Insurance Corporation (FDIC) which provides insurance coverage for bank deposits up to a certain amount. To find the answer to this question, one would need to have knowledge of the historical background and purpose of the Banking Act of 1935.