Early Keynesians believed that ________ interest rates during the Great Depression indicated that monetary policy was ________.

Question

Quizplus · Accepted Answer

Early Keynesians believed that low interest rates during the Great Depression indicated that monetary policy was too tight. They believed that the low interest rates were a result of a lack of demand for credit, rather than an indication of easy monetary policy. This led them to argue for more active government intervention to stimulate demand and promote economic growth.

Early Keynesians Believed That ________ Interest Rates During the Great