Answer:
The '30s have been a difficult time for countries because of the <u><em>Great Depression </em></u> (starting in 1929, a tough period lead by an economic slowdown having a huge impact on politics and general society. It was a time of a change in the liberalism way of economics, pushing the State to take the lead on making decisions)
Explanation:
The reason why the US abandoned the gold standard was a determination to fight the recession.
<u>The gold standard</u> is a monetary system in which the country's currency is equal to gold value.
Nowadays it's a quite problematic system, the gold value it's not permanent and it's value varies, depending on the supply and demand. However, is used as central banks' reserves.
Roosevelt tried to drop the gold standard value, one of the determination to help to fight the depression was forbidden people to have gold or savings in gold. The Government tried to release dollars without backing. In <u>the gold standard system</u>, this is not possible, the banks are not allowed to print money without backing, because this could lead countries to an irresponsible expenditure of money. <u>The gold standard system</u> is not flexible, not letting a country in devaluation increase the print of the money. This is the reason why the Government decided to expand the money supply without concerning about the gold movement, which leads the country to recover as a result of the gold inflow <em>(action took by Roosevelt demanding people to cashing in deposits and depleting the gold supply).</em>
- Reaching 1939, WW2 was taking place, and Public Spending begins to increase due to the war costs.
<em>The state had to leave a liberal economic system to a system where the Government had to take action to help the economy get out of the depression.</em>
