Question

The money supply fell during the Great Depression because __________

Group of answer choices
the monetary base also fell
the public held less currency, and the banks held less excess reserves
the public held more currency, and the banks held more excess reserves
the Fed did not yet exist

Answer 1

Answer: the public held more currency, and the banks held more excess reserves

Step-by-step explanation:

The Great Depression, was an economic downturn which brought about the reduction in output, mass unemployment, reduction in investment, banking panics etc.

Some of the factors that led to the Great Depression were the crash in stock market, banking panics which led to reduction in loanable funds. The money supply reduced because the public held more currency, and the banks held more excess reserves.