In terms of the aggregate demand and aggregate supply framework,the Great Depression can be viewed as a:
A)rightward shift of the aggregate demand curve.
B)rightward shift of the aggregate supply curve.
C)downward movement along the aggregate demand curve.
D)a leftward shift of the aggregate demand curve.
E)a leftward shift of the aggregate supply curve.

Question

Quizplus · Accepted Answer

The Great Depression is often characterized by a significant decrease in consumer spending and investment, which leads to a decrease in the demand for goods and services. This decrease in demand causes a leftward shift of the aggregate demand curve. As a result, firms decrease production to match the decrease in demand, which causes a leftward shift of the aggregate supply curve as well. However, it is primarily the leftward shift of the aggregate demand curve that causes the economic contraction associated with the Great Depression.

In Terms of the Aggregate Demand and Aggregate Supply Framework,the