Which of the following had the greatest impact in pulling the U.S. economy out of the Great Depression?
A) the economy's natural tendency to contract toward potential output
B) the federal government's aggressive policy of tax cuts
C) the federal government's aggressive policy of monetary stimuli
D) a precipitous drop in aggregate demand
E) increased spending during World War II

Question

Quizplus · Accepted Answer

Increased spending during World War II had the greatest impact in pulling the U.S. economy out of the Great Depression. The massive defense spending during the war created jobs and boosted demand in the economy, leading to increased production and economic growth. This spending helped to significantly reduce unemployment and increase output, providing a much-needed boost to the struggling economy.

Which of the Following Had the Greatest Impact in Pulling