APFIVE Drawing on the excerpt above, which of the following best describes the significance of the First New Deal in reshaping American economic policy?
Historian William E. Leuchtenburg writes: ‘The First New Deal represented a decisive expansion of the federal government’s role in the economy, seeking to stabilize banks, provide relief for struggling citizens, and reinvigorate a faltering economy. The Emergency Banking Relief Bill and the subsequent creation of the FDIC restored public confidence while also laying the foundation for a more interventionist state. Simultaneously, the New Deal’s agricultural policies and public works programs signified a shift towards using fiscal policy as an instrument of economic recovery. Critics have argued that these measures, although effective in the short term, set the stage for an overreliance on government intervention in later decades. Nonetheless, the proactive measures taken during this period marked a turning point in American economic policy. The New Deal era fundamentally redefined the relationship between the government and its citizens by establishing a social safety net and regulatory framework.’
- William E. Leuchtenburg, The Age of Roosevelt, 1995
It prioritized tax cuts and deregulation as measures to stimulate economic growth without direct government intervention.
It established a framework of government intervention that provided relief and restored public confidence through banking reforms and public works.
Its focus was mainly on military expenditure rather than economic stabilization, leaving unemployment unresolved.
It was a temporary measure that did not create lasting changes in the relationship between the federal government and the economy.
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