The Monetarist Explanation of the Great Depression Emphasizes the Fact

question 29

Multiple Choice

The monetarist explanation of the Great Depression emphasizes the fact that

• A)investment and consumption spending collapsed because of negative expectations
• B)the economy was basically unstable and could not recover because the government didn't increase spending drastically
• C)the Fed pushed interest rates to extremely low levels, which forced the economy into the liquidity trap
• D)the Fed didn't do enough to prevent the large number bank failures, which resulted in a huge decline in money supply
• E)the Fed failed to establish a strict monetary growth rule early on

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, usually with fixed dividends and without voting rights.

Bonds Payable

Bonds payable are long-term liabilities representing money a company must pay back to bondholders, typically at specified interest rates and dates.

Consolidated Financial Statements

Financial reports that combine the accounting and financial information of a parent company and its subsidiaries into one set of statements.

Retained Earnings

The portion of a company's profits not distributed to shareholders as dividends but retained for reinvestment in the business or to pay off debt.