The period 1940-1970 is described as which of the following in relation to global economic policy?

The period 1940-1970 is described as which of the following in relation to global economic policy?

• A. Era of monetarism
• B. High point of global Keynesianism
• C. Era of deregulation
• D. Era of supply-side economics

Answer: (B)

This period is defined by a global Keynesian approach to policy, with governments actively managing demand to secure full employment and steady growth, funded by public investment and welfare programs. Internationally, this approach was supported by the Bretton Woods framework, which tied currencies to a stable system of fixed exchange rates and created institutions like the IMF and World Bank to coordinate policy. Taken together, these features represent the peak of Keynesian thinking in global economic policy—a time when government-led demand management and cross-border cooperation were the norm. Monetarist ideas gained prominence later, as policymakers shifted toward controlling inflation through the money supply, particularly from the 1970s onward. Similarly, deregulation and supply-side economics rose to prominence in the 1980s, emphasizing market-based reforms and incentives. Because of these shifts, the 1940-1970 era best fits the description as the high point of global Keynesianism.

This period is defined by a global Keynesian approach to policy, with governments actively managing demand to secure full employment and steady growth, funded by public investment and welfare programs. Internationally, this approach was supported by the Bretton Woods framework, which tied currencies to a stable system of fixed exchange rates and created institutions like the IMF and World Bank to coordinate policy. Taken together, these features represent the peak of Keynesian thinking in global economic policy—a time when government-led demand management and cross-border cooperation were the norm.

Monetarist ideas gained prominence later, as policymakers shifted toward controlling inflation through the money supply, particularly from the 1970s onward. Similarly, deregulation and supply-side economics rose to prominence in the 1980s, emphasizing market-based reforms and incentives. Because of these shifts, the 1940-1970 era best fits the description as the high point of global Keynesianism.