Which of the following best expresses prevailing thought in 1929 concerning economic depressions?
A) Massive government aid to business is the best way to overcome a depression.
B) Economic downturns are natural and simply must be allowed to run their course.
C) The proper course during a depression is to lower tariff levels and raise taxes.
D) The key to overcoming a depression is to raise interest rates.

Question

Quizplus · Accepted Answer

In 1929, the prevailing thought was that economic downturns were natural and simply had to be allowed to run their course. This view was influenced by classical economic theory, which held that economic ups and downs were part of a natural cycle and that government intervention could often do more harm than good. It wasn't until the Great Depression had already taken hold that many people began to reconsider this view and push for more active government intervention to address economic problems.

Which of the Following Best Expresses Prevailing Thought in 1929