Possible explanations put forth for the Great Depression do not include:
A) a shift in the IS curve.
B) a shift in the LM curve.
C) the debt-deflation theory.
D) the Pigou effect.

Question

Quizplus · Accepted Answer

All of the other choices (A-C) are commonly discussed as possible explanations for the Great Depression. The Pigou effect, which suggests that lower prices can increase real wealth and spending, was not a widely accepted explanation for the Great Depression.

Possible Explanations Put Forth for the Great Depression Do Not