Which of the following is a real shock that contributed to the economic contraction during the Great Depression?
A) an increase in money supply growth
B) tax cuts
C) widespread bank failures
D) a reduction in tariff and other trade restrictions

Question

Quizplus · Accepted Answer

Widespread bank failures were a major shock during the Great Depression. The collapse of banks wiped out people's savings and led to a decrease in consumer spending and investment, worsening the economic downturn. The other options (A: increase in money supply growth, B: tax cuts, D: reduction in trade restrictions) would typically be seen as expansionary policies, and were not a significant factor in contributing to the Great Depression.

Which of the Following Is a Real Shock That Contributed