The Great Depression demonstrates that the appropriate fiscal and monetary policy to combat a recession would be
A) an increase in taxes and a contraction in the money supply.
B) a decrease in taxes and a contraction in the money supply.
C) a decrease in taxes and an expansion in the money supply.
D) an increase in taxes and an expansion in the money supply.

Question

Quizplus · Accepted Answer

The Great Depression showed that a contractionary fiscal and monetary policy can worsen a recession. To combat a recession, expansionary policy is needed. This can be achieved through a decrease in taxes and an expansion in the money supply, as this stimulates consumer spending and investment.

The Great Depression Demonstrates That the Appropriate Fiscal and Monetary