When demand declined in the Great Depression of 1929-1933,the GDP deflator:
A) increased by 15%.
B) increased by 18%.
C) decreased by 15%.
D) decreased by 18%.

Question

Quizplus · Accepted Answer

When demand declines, prices tend to fall. As a result, the GDP deflator, which measures the overall price level of all goods and services produced in the economy, would also decrease. The Great Depression of 1929-1933 was characterized by a massive decline in economic activity, resulting in a significant decrease in demand and therefore deflation.

When Demand Declined in the Great Depression of 1929-1933,the GDP