The Great Depression showed that the short-run aggregate supply and the aggregate demand curves:

Question

Quizplus · Accepted Answer

The Great Depression demonstrated that the short-run aggregate supply and the aggregate demand curves can intersect at output levels far below full employment. During the Great Depression, there was a significant decrease in aggregate demand, which led to a decrease in output and an increase in unemployment. This illustrated the concept of a recessionary gap, where the equilibrium output is below the full employment level.

The Great Depression Showed That the Short-Run Aggregate Supply and the Aggregate