In A Monetary History of the United States, Friedman and Schwartz argued that:
A)the United States should never have engaged in free trade with China.
B)the Federal Reserve could have prevented the banking crisis and the Great Depression.
C)the United States should return to the gold standard.
D)an electronic banking system is likely to contribute to the severity of financial crises.

Question

Quizplus · Accepted Answer

Friedman and Schwartz argued that the Federal Reserve could have prevented the banking crisis and the Great Depression through appropriate monetary policy. They analyzed the historical data and showed the Fed's mistakes, such as the failure to act as a lender of last resort during the 1930s financial crisis. Thus, they believed that the Fed should play a more active role in stabilizing the economy by controlling the money supply and interest rates.

In a Monetary History of the United States, Friedman and Schwartz