Many economists today agree that many of the recessions of the twentieth century can be traced to

Question

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Many economists believe that significant reductions in the rate of growth of the money supply can lead to a decrease in demand and investment, ultimately leading to a recession. This theory is supported by the fact that the Federal Reserve's tight monetary policy in the early 1980s contributed to the severe recession that followed.

Option B, consumers saving more than their incomes allow, can contribute to a slowdown in growth, but typically does not trigger a recession.

Option C, faulty investments, can lead to economic downturns, but is not the root cause of most recessions.

Option D, falling interest rates, can actually stimulate economic growth and are used as a tool to combat recession.

Option E, increases in aggregate demand and supply, may actually prevent or end a recession, rather than cause it.

Many Economists Today Agree That Many of the Recessions of the Twentieth