The Great Depression demonstrated that:
A) there can be no macroeconomic equilibrium.
B) short-run equilibrium can occur at levels substantially less than full employment.
C) inflation is a problem worse than unemployment.
D) government intervention in the economy results in economic depressions.

Question

Quizplus · Accepted Answer

The Great Depression showed that economies can reach a short-run equilibrium with high unemployment and underutilized resources, indicating that equilibrium can occur at less than full employment.

The Great Depression Demonstrated That