The Great Depression showed that the short-run aggregate supply curve and the aggregate demand curve
A) must always intersect at full employment.
B) can intersect at output levels below full employment.
C) must intersect at output levels above full employment.
D) can never lead to deflation.

Question

Quizplus · Accepted Answer

The Great Depression showed that the short-run aggregate supply curve and the aggregate demand curve can intersect at output levels below full employment, leading to high levels of unemployment and economic recession.

The Great Depression Showed That the Short-Run Aggregate Supply Curve