U.S. Banking in the 20th Century Quick Check

Question

4 of 54 of 5 Items
Question
Elijah is concerned that his bank is making poor financial decisions and worries that his $1,200
deposited in savings will be lost if the bank were to fail. As long as his bank meets the necessary requirements, which of the following protects Elijah against this potential loss?(1 point)
Responses

fractional-reserve banking
fractional-reserve banking

Glass-Steagall
Glass-Steagall

Home Owners' Loan Act
Home Owners' Loan Act

Federal Deposit Insurance Corporation

Answer 1

The correct response is Federal Deposit Insurance Corporation.

The Federal Deposit Insurance Corporation (FDIC) protects depositors by insuring deposits, which means that if a bank fails, depositors can recover their money up to a certain limit (currently $250,000 per depositor, per bank).