The following question are based on the following diagrams in which D₀ and S₀ refer to the initial aggregate demand and short-run aggregate supply curves:

-The Great Depression is best illustrated by diagram
A) A.
B) B.
C) C.
D) D.
E) E.

Question

The following question are based on the following diagrams in which D₀ and S₀ refer to the initial aggregate demand and short-run aggregate supply curves:
 
-The Great Depression is best illustrated by diagram
A) A. 
B) B. 
C) C. 
D) D. 
E) E.

Quizplus · Accepted Answer

Diagram B shows a significant decrease in both aggregate demand and short-run aggregate supply, which is consistent with the conditions of the Great Depression. The decrease in aggregate demand is due to factors such as a decrease in consumer spending and investment, while the decrease in short-run aggregate supply may be due to factors such as unemployment and decreased productivity. The other diagrams do not show this combination of factors that led to the Great Depression.

The Following Question Are Based on the Following Diagrams in Which