Category - Economics

FDIC is an acronym for which financial institution?
  1. Federal Direct Intermonetary Committee
  2. Financial Direct Insurance Congress
  3. Federal Deposit Insurance Corporation
  4. Financial Deposit Intermonetary Conglomerate
Answer: C - FDIC is an abbreviation for the Federal Deposit Insurance Corporation. Their primary aim is to insure all private savings account deposits up to $100,000, in order to protect the money of bank customers. Bank failures played a critical role in every American economic disaster through the Great Depression, when people would suddenly be bankrupted when their banks ran out of money or were victimized. This possibility caused people to make a “run on the banks” to withdraw all of their money when they suspected economic downturns. However, in a vicious cycle, the bank runs were often one of the biggest contributing factors to recessions and depressions.
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