Asked by
Minh Trúc Hu?nh
on Dec 11, 2024
Verified
Economic analysis indicates that the monetary policy of the 1930s, which shifted back and forth between restrictive monetary policy and expansionary monetary policy, would likely result in
A) economic stability and growth in real levels of output.
B) keeping the general level of prices relatively stable because the periods of restrictive policy would just offset the periods of expansion.
C) an environment of uncertainty, which would lead to economic instability.
D) economic stability, because changes in monetary policy can be counted on to exert a predictable impact on the economy quickly.
Monetary Policy
The process by which the central bank or monetary authority of a country controls the supply of money, often targeting an inflation rate or interest rate to ensure price stability and trust in the currency.
Restrictive Policy
Regulations or policies implemented to limit or control certain activities or behaviors.
Expansionary Policy
Economic policies implemented by a government to stimulate growth in a sluggish economy, typically by increasing money supply or reducing taxes.
- Learn about the position and repercussions of monetary policy throughout the time of the Great Depression.
- Assess the role of monetary contraction and expansion in economic stability and growth.
Verified Answer
SP
Learning Objectives
- Learn about the position and repercussions of monetary policy throughout the time of the Great Depression.
- Assess the role of monetary contraction and expansion in economic stability and growth.