[amp_mcq option1=”Excessive import in relation to exports” option2=”Significant changes in technology and resources availability” option3=”Inappropriate monetary policy” option4=”Excessive export in relation to imports” correct=”option3″]
The correct answer is C. Inappropriate monetary policy.
Monetarists believe that the Great Depression was caused by a decrease in the money supply. This decrease in the money supply led to a decrease in aggregate demand, which caused a decrease in output and employment.
Excessive import in relation to exports is not a cause of the Great Depression. In fact, the United States had a trade surplus during the Great Depression.
Significant changes in technology and resources availability are not a cause of the Great Depression. There were no significant changes in technology or resources availability during the Great Depression.
Excessive export in relation to imports is not a cause of the Great Depression. In fact, the United States had a trade surplus during the Great Depression.
Here is a more detailed explanation of each option:
- Excessive import in relation to exports. This is not a cause of the Great Depression. In fact, the United States had a trade surplus during the Great Depression. This means that the United States was exporting more goods and services than it was importing. A trade surplus is usually a sign of a healthy economy.
- Significant changes in technology and resources availability. This is not a cause of the Great Depression. There were no significant changes in technology or resources availability during the Great Depression.
- Inappropriate monetary policy. This is the correct answer. Monetarists believe that the Great Depression was caused by a decrease in the money supply. This decrease in the money supply led to a decrease in aggregate demand, which caused a decrease in output and employment.
- Excessive export in relation to imports. This is not a cause of the Great Depression. In fact, the United States had a trade surplus during the Great Depression.