A WISE ECONOMIST ASKS A QUESTION Source: John T. McCutcheon, Chicago Tribune, 1931 (adapted) 19 Why were President Herbert Hoover and the Republican Party unable to solve the problem addressed in this cartoon? (1) They believed in limited federal government - intervention in economic activity. (2) They knew the problem existed only in rural areas of the United States. (3) They thought that foreign influences were the primary cause of the bank crisis. (4) They believed the federal government must first pay back those who lost money due to stock speculation.

To answer this question, we need to consider the historical context of President Herbert Hoover's administration and the Republican Party's economic policies during the early 1930s, which was the time of the Great Depression.Step 1: Understand the historical contextHerbert Hoover was the President of the United States from 1929 to 1933, a period that included the onset of the Great Depression. The Republican Party, which Hoover was a member of, traditionally favored policies of limited government intervention in the economy.Step 2: Analyze the options(1) They believed in limited federal government intervention in economic activity.(2) They knew the problem existed only in rural areas of the United States.(3) They thought that foreign influences were the primary cause of the bank crisis.(4) They believed the federal government must first pay back those who lost money due to stock speculation.Step 3: Eliminate incorrect optionsOptions (2), (3), and (4) can be eliminated based on historical accuracy. The Great Depression affected both urban and rural areas, so option (2) is incorrect. While foreign influences did play a role in the global economic situation, they were not considered the primary cause of the bank crisis in the U.S., so option (3) is incorrect. Option (4) is also incorrect because the focus of the government at the time was not on paying back those who lost money due to stock speculation.Step 4: Identify the correct answerOption (1) is the correct answer. President Herbert Hoover and the Republican Party were known for their belief in limited federal government intervention in economic activity. This philosophy influenced their response to the Great Depression, and many historians argue that it was one of the reasons they were unable to effectively address the economic problems of the time.Final Answer:(1) They believed in limited federal government intervention in economic activity.