Bank:

A financial institution is a financial human body mandated to expropriate deposits and advance credit come qualified borrowers. It also engages in wide range administration, currency exchange, and safe deposit boxes. The varied bank varieties include invest banks, advertising or corporate banks, retail banks, and others regulation by the state or the country"s central bank. With various bank accounts favor checking and also savings account and also certificate deposits, banks administer a safe ar to store cash.

You are watching: In the 1920s, many rural banks failed because


The correct answer is option (ii) farmers could not repay their loans.

Many rural banks failed since farmers could not repay their loans. Consumerism throughout the 1920s enhanced the economic climate as farmers boosted their demand for goods and also services in the economy. Farmers in rural locations bought too lot stock ~ above margin, i m sorry had linked risk that if the share value lessened or dropped, the borrowers who room farmers themselves had actually to pay back the difference. Paying back the distinction meant that farmer had less money come spend and even salary the distinction on stock. This brought about the fall of 70 financial institutions in the very first year and 4,000 financial institutions during the entire decade together farmers defaulted top top loans. Therefore, the loss of countless rural financial institutions was occasioned by farmers inability to offset their loans.


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