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Question
- what caused banks to run out of money during the stock market crash of 1929?people sold off bank stocks, making them worthless.people stopped taking out loans because they were bankrupt.the federal reserve board reduced how much money it gave banks to loan.their customers could not repay their loans.
During the 1929 Stock Market Crash, many customers had taken out loans to invest in stocks. When the market crashed, they lost their investments and could not repay these loans. Banks relied on loan repayments to maintain their cash reserves; without this income, they quickly ran out of money. Other options are incorrect: bank stock sell-offs did not directly drain bank cash reserves, people not taking new loans was not the core issue, and the Federal Reserve's actions were not the direct cause of banks running out of money at the time of the crash.
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Their customers could not repay their loans.