Asked by Julia Lavier on Jun 13, 2024
Verified
The laissez-faire approach popular before the Great Depression influenced the U.S.government to see business downturns as:
A) natural phases in an otherwise healthy system and to therefore take short-term deficit spending measures to help recovery.
B) natural phases in an otherwise healthy system and to therefore wait for recovery to occur naturally.
C) serious maladies in an otherwise healthy system and to therefore work to redesign the system to avoid such failure in the future.
D) failures of the type of system Adam Smith envisaged and to therefore work to move toward an open economy with free trade.
E) failures of the system to achieve the form that Adam Smith envisaged and to therefore work to decrease government interference at the micro level.
Laissez-Faire
An economic philosophy of free-market capitalism that opposes government intervention.
Great Depression
A severe worldwide economic downturn that took place during the 1930s.
- Understand the historical context of macroeconomic policies and their evolution over time, particularly during significant economic downturns like the Great Depression.
Verified Answer
AN
ADGN Noor Aida Binti Zainal AbidinJun 13, 2024
Final Answer :
B
Explanation :
The laissez-faire approach viewed business downturns as natural phases in an otherwise healthy system and believed that the economy would eventually recover naturally without government intervention. Therefore, the U.S. government during this time period would wait for recovery to occur naturally and would not take deficit spending measures to help the economy.
Learning Objectives
- Understand the historical context of macroeconomic policies and their evolution over time, particularly during significant economic downturns like the Great Depression.