Question

What explains the cause-and-effect relationship between government policies in the 1920s and the rise in gross domestic product?

a) Regulations against collective bargaining kept wages low.
b) Regulations prohibited the importation of inferior products.
c) High tariffs allowed domestic production to expand with little competition.
d) High tariffs created beneficial conditions for exports to foreign markets.

Answer 1

High tariffs alloyed domestic production to expand with little competition, leading to a rise in gross domestic product (GDP) in the 1920s.

Step-by-step explanation:

The cause-and-effect relationship between government policies in the 1920s and the rise in gross domestic product can be explained by high tariffs that allowed domestic production to expand with little competition.By imposing high tariffs, the government made imported goods more expensive, which led to increased demand for domestically produced goods. This, in turn, stimulated economic growth and resulted in a rise in gross domestic product (GDP).For example, the Smoot-Hawley Tariff Act of 1930 increased tariffs on imported goods by an average of 50%. While it was controversial and had negative consequences, it did provide a short-term boost to domestic production and GDP.