On an aggregate demand and aggregate supply graph, how can the Great Depression be pictured?
A) as a leftward shift of the aggregate supply curve
B) as a rightward shift of the aggregate supply curve
C) as a leftward shift of the aggregate demand curve
D) as a rightward shift of the aggregate demand curve

Question

On an aggregate demand and aggregate supply graph, how can the Great Depression be pictured?  
A) as a leftward shift of the aggregate supply curve 
B) as a rightward shift of the aggregate supply curve 
C) as a leftward shift of the aggregate demand curve 
D) as a rightward shift of the aggregate demand curve

Quizplus · Accepted Answer

The Great Depression was caused by a significant decrease in consumer spending, investment, and trade. This led to a decrease in aggregate demand, shifting the AD curve to the left. As a result, output and employment levels fell, causing a significant contraction in the economy. Therefore, the correct answer is C.

On an Aggregate Demand and Aggregate Supply Graph, How Can