The Great Depression, in which real GDP fell and unemployment rose, can be characterized as a
A) inflationary gap.
B) long-run equilibrium.
C) recessionary gap.
D) full-employment equilibrium.

Question

Quizplus · Accepted Answer

The Great Depression, characterized by a significant fall in real GDP and a rise in unemployment, is an example of a recessionary gap, where actual economic output is less than the potential output of the economy.

The Great Depression, in Which Real GDP Fell and Unemployment