A Level History - America - Practice Exam

What major event did the Emergency Banking Relief Act initiate?

1. Closure of banks for a set period

2. Construction of new public works

3. Establishment of social security

4. Funding for agricultural programs

The correct answer is: Closure of banks for a set period

The Emergency Banking Relief Act, passed in March 1933 during the Great Depression, initiated the closure of banks for a set period. This was a critical step taken by the federal government to stabilize the banking system. By temporarily shutting down banks, the Act aimed to prevent further bank runs, restore public confidence in the financial system, and allow the government to assess the health of financial institutions. The closure of banks also gave the government time to implement reforms to strengthen the banking system, ultimately leading to the reopening of only those banks deemed solvent. This initiative was crucial in halting the cycle of bank failures that had plagued the economy, thus marking a significant moment in the efforts to recover from the economic crisis. The success of this measure reinforced the federal government's role in regulating and stabilizing the banking industry, paving the way for further financial reforms in the New Deal era. Other options refer to different initiatives that did not originate from this specific Act, highlighting the focused nature of the Emergency Banking Relief Act's objectives.