Question

How did the government of the United States react to the Great Depression?

It immediately provided major assistance to the needy and strictly regulated the stock market.


It immediately took control of the stock market and later raised interest rates.


It eventually raised interest rates after many banks and businesses had already closed.


It provided minimal assistance initially but eventually increased assistance and market regulation.

Answer 1

D. It provided minimal assistance initially but eventually increased assistance and market regulation.

Answer 2

The last statement is correct.

When the Great Depression hit, Herbert Hoover was president. As an advocate of laissez faire economics, he felt that having the government interfere with the economy would have negative results. Hoover does create a few public works projects (like the Hoover Dam) in order to decrease unemployment but these programs are short lived. Overall, Hoover is remembered negatively by the American public, as he did not do enough to help America during this time.

This is why when he ran for re-election he lost to Franklin D. Roosevelt. Once in office, FDR implemented the "New Deal." This economic program was based around creating government agencies that would help decrease unemployment and improve American society in general. Along with this, FDR set up market regulations (like the Securities and Exchange Commission) to ensure that there is never another crash in wall street like the one in 1929.