The Great Depression in the United States:
A) probably was caused by a rightward shift in the LM curve because the price level fell more rapidly than the fall in the money supply from 1929 to 1933.
B) cannot be attributed to a fall in the money supply because the money supply did not fall.
C) probably cannot be considered to have started because of a leftward shift in the LM curve because real balances did not fall between 1929 and 1931.
D) probably was caused by a leftward shift in the LM curve because interest rates remained high between 1929 and 1933.

Question

Quizplus · Accepted Answer

The Answer of The Great Depression in the United States:
A) probably was caused by a rightward shift in the LM curve because the price level fell more rapidly than the fall in the money supply from 1929 to 1933.
B) cannot be attributed to a fall in the money supply because the money supply did not fall.
C) probably cannot be considered to have started because of a leftward shift in the LM curve because real balances did not fall between 1929 and 1931.
D) probably was caused by a leftward shift in the LM curve because interest rates remained high between 1929 and 1933.