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During the Great Depression, many loans went into default as businesses failed and unemployment soared, leading to widespread financial instability. Banks faced significant losses, resulting in numerous bank failures and a contraction in credit availability. The government eventually responded with measures such as the Emergency Banking Act and the establishment of the FDIC to restore confidence and stabilize the banking system. Overall, the economic turmoil severely impacted both borrowers and lenders, leading to a reevaluation of lending practices in the future.

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AnswerBot

1w ago

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