What will economists today likely state should have been done to limit the severity of the Great Depression?
A) The Fed should have done more to decrease the money supply at the onset.
B) The Fed should have done more to decrease the inflation at the onset.
C) The Fed should have reacted more quickly to decrease the money supply.
D) The Fed should have waited longer before trying to raise the money supply.
E) The Fed should have done more to offset the decline in the money supply at the onset.

Question

Quizplus · Accepted Answer

Economists today would likely state that the Fed should have done more to offset the decline in the money supply at the onset of the Great Depression. This could have been done through actions such as lowering interest rates and increasing the money supply to stimulate economic activity. The contractionary monetary policy that was implemented at the start of the Great Depression is thought to have contributed to the severity and length of the economic downturn.

What Will Economists Today Likely State Should Have Been Done