Question

Asset depreciation and its impact on economic analyses

Answer 1

Economic depreciation is different than the accounting depreciation recognized for tangible assets as those assets are used to create revenue. While land does not depreciate, buildings and other tangible assets do recognize depreciation, which is the decline in value of a physical asset as the asset is used over time.

Answer 2

During the Depression, half of the nation's banks failed. In the first 10 months of 1930 alone, 744 failed. That was 1,000 percent more than the annual rate in the 1920s. By 1933, 4,000 banks had failed. As a result, depositors lost $140 billion.

People were stunned to find out that banks had used their deposits to invest in the stock market. They rushed to take their money out of the bank. These bank “runs” forced even good banks out of business. Fortunately, that rarely happens anymore. Depositors are protected by the Federal Deposit Insurance Corporation. FDR created that program during the New Deal This is all about the depression