A sharp recession hit in 1937, caused in part by the Federal Reserve’s decision to increase its requirements for money in reserve. Though the economy began improving again in 1938, this second severe contraction reversed many of the gains in production and employment and prolonged the effects of the Great Depression through the end of the decade.
Which one of the following sequences shows the correct precedence as per the given passage?
1
Sharp recession => Economy improved => Federal Reserve's decision => Prolonged effects of Great Depression
2
Federal Reserve's decision => Sharp recession => Economy improved => Prolonged effects of Great Depression
3
Sharp recession => Economy improved => Prolonged effects of Great Depression => Federal Reserve's decision
4
Economy improved => Prolonged effects of Great Depression => Federal Reserve's decision => Sharp recession