A depression economy has considerable slack,so:

Question

Quizplus · Accepted Answer

In a depression economy, there is considerable slack, which means that there are unused resources such as labor and capital. As a result, employers are likely to lay off workers or reduce working hours, leading to high unemployment. Option A is, therefore, the correct answer. Option B is incorrect because there is excess plant and equipment, which is not being used efficiently. Option C is also incorrect because all resources are not being used efficiently. Finally, option D is incorrect because there is no increase in aggregate price levels during a depression economy.

A Depression Economy Has Considerable Slack,so