During the Great Depression, businesspeople in the United States were very pessimistic about the future of economic growth and reluctant to increase investment spending even when interest rates fell. How did this limit the potential for monetary policy to help alleviate the Depression?

2B. EW Access the Discovering Data exercise for Chapter 30 Problem 13 online to answer the following questions.

a. How does the relationship between the effective federal funds rate and the Taylor Rule change throughout the Great Recession?

b. Compare the long-term and short-term interest rate before and after the Great Recession.