International Baccalaureate (IB) Practice Exam

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What did New Deal policymakers believe about consumer credit during the Great Depression?

It was a risky venture
It could be profitable
It was only for the wealthy
It should be avoided

The correct answer is: It could be profitable

New Deal policymakers viewed consumer credit as a means to stimulate economic recovery during the Great Depression. They believed that encouraging consumer spending through the availability of credit could help drive demand for goods and services, which in turn would generate production, create jobs, and boost the overall economy. By making consumer credit more accessible, policymakers aimed to empower the middle class and lower-income individuals to purchase items they may not have been able to afford outright. This perspective was grounded in the idea that increased consumer spending was essential for economic revival during a time when people were struggling with high unemployment and widespread financial insecurity. The emphasis on fostering consumer credit as a tool for economic growth was a key aspect of the New Deal's approach to navigating the economic crisis.