Question

which of the following had the greatest impact in pulling the u.s. economy out of the great depression? group of answer choices the economy's natural tendency to contract toward potential output the federal government's aggressive policy of tax cuts the federal government's aggressive policy of monetary stimuli a precipitous drop in aggregate demand increased spending during world war ii

Answer 1

Increased government spending and economic control during World War II had the greatest impact on pulling the U.S. out of the Great Depression, as it maximized production, created jobs, and stimulated aggregate demand.

Step-by-step explanation:

The Great Depression greatly challenged the U.S. economy with high unemployment rates, bank failures, and a significant drop in industrial output. Initially, the government took a hands-off, laissez-faire approach, anticipating that the economy would correct itself. However, the gravity of the Great Depression led to the adoption of Keynesian economic policies, which suggested government spending was necessary to boost consumer demand. President Roosevelt's implementation of the New Deal, with programs like the WPA, brought relief. Yet, it was the massive increased spending during World War II that pulled the U.S. fully out of the Depression. This wartime production surge created jobs, ramped up factory output, and expanded government economic control, eventually leading to long-term recovery.