"Three long years ago we declared war on the Depression. We were determined that men shall not starve in this land of plenty. We have used the credit of the Government to aid private credit. The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little." — Franklin D. Roosevelt, 1937
The 1937 "Roosevelt Recession" shown in the chart followed which policy choice?
- A
Tariff hikes under Smoot-Hawley
- B
Wage and price controls
- Ccheck_circle
Premature spending cuts and Federal Reserve tightening
- D
Devaluation of the dollar
Explanation
FDR's 1937 attempt to balance the budget by cutting WPA spending while the Fed raised reserve requirements caused a sharp downturn.