Policy makers before the Great Depression were:
A) uncertain about the appropriate measure to use against a recession in the absence of any clear theory about the cause of business cycles.
B) using both fiscal and monetary policies to combat the harmful effects of recession on output and employment.
C) against using monetary policies to fight the economic downturns caused by business cycles.
D) in favor of using only fiscal policies to fight the economic booms caused by business cycles.

Question

Quizplus · Accepted Answer

Before the Great Depression, policy makers did not have a clear theory or understanding of the cause of business cycles, which made it difficult for them to determine the appropriate measure to take against a recession. Therefore, they were uncertain about the most effective policy to use in combating the harmful effects of a recession on output and employment.

Policy Makers Before the Great Depression Were