Why did banks close during the Great Depression?
They could not afford to pay the workers to keep banks open.
They had taken out too many loans that they could not repay so they foreclosed.
They were shut down by the government in order to give their money to the poor.
They did not have the money to pay everyone who wanted to withdraw his or her savings.
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The correct answer is: They did not have the money to pay everyone who wanted to withdraw his or her savings. During the Great Depression, many banks experienced runs on deposits, meaning large numbers of people rushed to withdraw their money at the same time. This led to banks not having enough cash on hand to meet the demand, forcing them to close.
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