Before the Great Depression of the 1930s, most economists believed that
A)only active government policy could prevent recessions or inflation.
B)a capitalist economy had a natural tendency to cure recessions or inflation.
C)a capitalist economy had a natural tendency to inflation.
D)recessions and depressions were inevitable until the economy broke down completely.

Question

Quizplus · Accepted Answer

Most economists believed that a capitalist economy had a natural tendency to cure recessions or inflation before the Great Depression of the 1930s. They believed that the market forces would eventually correct any imbalances and restore equilibrium. However, the severity and lasting impact of the Great Depression challenged this view and led to the development of new economic theories and policies that emphasized the role of government intervention in stabilizing the economy.

Before the Great Depression of the 1930s, Most Economists Believed