Recall Application 3, "Can Labor Market Policies Account for the Great Depression," to answer the following questions:
-According to the application, what did Cole and Ohanian include in their business cycle models to explain the increase in real wages during the Great Depression?

Question

Quizplus · Accepted Answer

Cole and Ohanian included government interventions that affected the labor market, specifically the National Industrial Recovery Act (NIRA) and the Davis-Bacon Act. These policies led to higher wages for workers in certain industries and regions, which contributed to the decrease in employment and increase in unemployment during the Great Depression.