During the 1920s, the Federal Reserve increased the money supply and kept interest rates very low, encouraging consumer spending and the brisk borrowing of money. Business investment and the expansion of businesses grew rapidly during the 1920 to meet the needs of this huge consumer spending. However, during the Crash of 1929, the Federal Reserve reversed its expansionary monetary policy and cut off the money supply by almost 30% causing banks to not have enough currency on hand when depositors wanted their hard-earned money. What was the long-term effect of the Federal Reserve actions? A election of Franklin D Roosevelt B total collapse of banking industry C high unemployment and low inflation D slow down of the economy and high unemployment