During the Great Depression of the 1930s,the aggregate demand curve intersected the aggregate supply curve in:
A) the horizontal portion of the aggregate supply curve.
B) the upward-sloping part of the aggregate supply curve.
C) the vertical portion of the aggregate supply curve.
D) the early years in the horizontal portion, but in the later years in the vertical portion.
E) the early years in the vertical portion, but in the later years in the horizontal portion.

Question

Quizplus · Accepted Answer

During the Great Depression, the economy was operating far below its potential output, so the aggregate demand curve intersected the horizontal portion of the aggregate supply curve, indicating significant underutilization of resources.

During the Great Depression of the 1930s,the Aggregate Demand Curve