Question

during the banking crisis of 1907 many large banks failed. this caused small banks that had money on deposit in large banks to fail as well. this type of money and banking structure is known as

Answer 1

The type of money and banking structure that is known when large banks fail causing small banks that had money on deposit in large banks to also fail is known as a contagion effect.

Step-by-step explanation:

The type of money and banking structure that is known when large banks fail causing small banks that had money on deposit in large banks to also fail is known as a contagion effect. This is because the failure of one institution spreads to others, leading to a domino effect of bank failures. During the banking crisis of 1907, the failure of large banks led to the collapse of smaller banks and widespread financial panic. It was a result of the interconnections between banks in the banking system.