The Great Depression and World War II both caused major deviations from trend GDP.The Great Depression resulted in real GDP moving significantly ________ trend GDP; World War II resulted in real GDP moving significantly ________ trend GDP.
A) above; above
B) above; below
C) below; above
D) below; below

Question

Quizplus · Accepted Answer

The Great Depression resulted in real GDP moving significantly below trend GDP, as the economy experienced a severe contraction. World War II resulted in real GDP moving significantly above trend GDP, as government spending on the war effort stimulated economic growth.

The Great Depression and World War II Both Caused Major