Countries with the
A) biggest deflations and output contractions are countries which were never on the gold standard until 1936.
B) biggest inflations and output contractions are countries which were on the gold standard until 1936.
C) lowest deflations and output contractions are countries which were on the gold standard until 1936.
D) biggest deflations and output increases are countries which were on the gold standard until 1936.
E) biggest deflations and output contractions are countries which stayed on the gold standard until 1936.

Question

Quizplus · Accepted Answer

Countries that experienced the biggest deflations and output contractions during the Great Depression were those that remained on the gold standard the longest, until 1936. This adherence limited their ability to expand monetary policy to combat deflation and economic downturns.