2007-02-21 12:27:33 · 3 answers · asked by AJ 1 in Arts & Humanities ➔ History
The government caused it. Those in charge of setting interest rates knew the economy was beginning to overheat and that something had to be done. When that happens the usual practice is to increase the prime lending rate. But, instead of bumping up the rate incrementally (i.e. a decimal of a percentage point over time) they jumped the rate up several percentage points and caused the economy to collapse.
2007-02-21 12:37:45 · answer #1 · answered by Albannach 6 · 0⤊ 0⤋
Yes they could sorta have but not at the time they did not have the power necessary to do that. Now thanks to the great depression we can keep unemployment between 3 and 7 percent with interest rates using John Maynard Kayne's theories. O and to all those who oppose social welfare programs you only have a job because we INTENTIONALLY keep AT LEAST 3 percent of the population out of work or massive inflation causing another depression would in sue this is part of the Kaynesian modified capitalism we use so uhh intentionally keeping part of the people unemployed allows for a more stable economy but until after the depression the gov didn't have the power, mandate, or information necessary to prevent the crash. The financial institutions just were not there
2007-02-21 21:53:54 · answer #2 · answered by me 2 · 0⤊ 0⤋
Figured out their finances better to prevent less inflation...but I guess it was sort of inevitable (meaning it had to happen at at least one point in history)
2007-02-21 20:35:09 · answer #3 · answered by lildevilgurl152004 7 · 0⤊ 0⤋