The Great Depression:

Question

Quizplus · Accepted Answer

The Great Depression is often credited with giving rise to modern macroeconomics, as economists sought to understand the factors behind the severe economic downturn. The Depression also stimulated the creation of Keynesian economics, which emphasized the role of government intervention in stabilizing the economy. Therefore, choices a and c are both correct. Choice b is incorrect because the Great Depression was actually a period of contraction in output. Choice d is also incorrect because the rational expectations revolution was a development that came later, in the 1970s.