The severity of the Depression increased in 1931 when the Federal Reserve Board
A) closed all financially-ailing banks.
B) declared bankruptcy.
C) weakened the value of the dollar.
D) expanded the money supply.
E) raised interest rates.

Question

Quizplus · Accepted Answer

The Federal Reserve Board raising interest rates in 1931 made it more difficult for businesses and individuals to borrow money, which limited their ability to spend and invest. This contractionary monetary policy worsened the economic conditions of the Depression.

The Severity of the Depression Increased in 1931 When the Federal