During the Great Depression, real GDP decreased, unemployment soared, and the inflation ratewas negative. Which would have been the appropriate federal government policy combination to improve economic performance?

Question

Quizplus · Accepted Answer

Increasing government expenditure and decreasing taxes would stimulate demand, while increasing the quantity of money would encourage spending and investment, all of which are aimed at boosting economic activity during a recession.

During the Great Depression, Real GDP Decreased, Unemployment Soared, and the Inflation