During the Great Depression, economists first began studying the relationship between
A)changes in GDP and changes in interest rates.
B)changes in aggregate expenditures and changes in GDP.
C)changes in nominal GDP and changes in real GDP.
D)changes in stock prices and changes in price controls.
E)changes in unemployment and changes in inflation.

Question

Quizplus · Accepted Answer

During the Great Depression, economists studied the relationship between changes in aggregate expenditures (the total amount of spending in the economy) and changes in GDP (the total value of goods and services produced in the economy). This led to the development of Keynesian economics, which emphasized the role of government spending in stimulating economic growth during a recession.

During the Great Depression, Economists First Began Studying the Relationship