When the U.S.aggregate demand curve shifted to the left during the Great Depression:
A) tax rates decreased.
B) real gross domestic product (GDP) increased.
C) the price level increased.
D) the money supply increased.
E) real GDP decreased.

Question

Quizplus · Accepted Answer

When the U.S. aggregate demand curve shifted to the left during the Great Depression, it caused a decrease in real GDP. This is because a shift to the left indicates a decrease in demand for goods and services, which in turn results in a decrease in production and therefore real GDP. None of the other options are correct, as tax rates did not decrease, the price level did not increase, and neither did the money supply increase.