Final answer:
States often react against tight credit policies due to restrictive monetary measures, which can cause economic issues and high interest rates. During the Great Depression, such policies led to a shift towards Keynesian economics for government intervention.
Step-by-step explanation:
The tight credit policies of banks that contribute to a depression and lead to states reacting negatively can typically be associated with what is seen as restrictive monetary measures. This is because these policies can limit the money supply, leading to business hardship and high interest rates that can cut into profits. Such policies may be seen as an exertion of financial control that is deemed too tight, thereby causing economic stagnation and distress. Therefore, many states would react against what they perceive as restrictive monetary measures, which would align with answer choice E).
During the Great Depression, for example, the hands-off laissez-faire approach to economic policy by the government eventually gave way to Keynesian economic policies, emphasizing government intervention to stimulate consumption and lift the economy out of the Depression. This marked a shift from earlier policies that were seen as too restrictive and unresponsive to the financial crises of the time.