Conservatives argue that the Depression of the 1930s would have been a "normal" business cycle if
A) people had a higher propensity to save.
B) the Federal Reserve Board had not raised interest rates.
C) aggregate demand had fallen.
D) Americans had a stronger work ethic.
E) None of the above.
F) All of the above.

Question

Quizplus · Accepted Answer

Conservatives often point to the Federal Reserve Board's decision to raise interest rates in 1928 and 1929 as a key factor that turned a mild recession into the devastating Great Depression. They argue that if the Fed had instead lowered interest rates or kept them stable, the economy may have been able to recover more quickly and avoid the severity of the Depression.

Conservatives Argue That the Depression of the 1930s Would Have