Question

The Fed was created A. to help finance government expenditures during World War II. B. after the stock market crash of 1929. C. to help channel funds to the residential mortgage market. D. after financial panics in the late 1800s and early 1900s.

Answer 1

Answer: D. After financial panics in the late 1800s and early 1900s.

Explanation:

Since 1863, the U.S. did not have a Central Bank that could asses a semblance of control over the currency. The financial panic of 1907 which saw a sudden decrease in stock value in the New York Stock exchange, led to a push from legislators and economists to establish a central bank or reserve that could intervene when markets showed signs of instability. Though a National Monetary Comission was established in 1908, The Fed was born in 1913 with the Federal Reserve Act, enacted on the same year.