Which of the following did not contribute to the severity of the Great Depression?
A) A sharp reduction in the money supply during the early 1930s.
B) A large tax increase (to balance the budget) in the early 1930s.
C) Substantial increases in the tariff rates on imported goods.
D) A reduction in government expenditures and a substantial cut in personal income tax rates during 1932 and again in 1936.

Question

Quizplus · Accepted Answer

The reduction in government expenditures and a substantial cut in personal income tax rates were not significant contributors to the severity of the Great Depression. In fact, such measures could potentially stimulate economic activity, unlike the other options which directly worsened the economic situation.

Which of the Following Did Not Contribute to the Severity