During the Great Depression,economists first began studying the relationship between
A)changes in GDP and changes in interest rates.
B)changes in aggregate expenditures and changes in GDP.
C)changes in nominal GDP and changes in real GDP.
D)changes in stock prices and changes in price controls.

Question

Quizplus · Accepted Answer

During the Great Depression, economists first began studying the relationship between changes in aggregate expenditures (i.e. spending by households, firms, and government) and changes in GDP. This was in part because the severity of the Depression led to widespread unemployment and a reduction in aggregate expenditures, which in turn contributed to a decrease in GDP. Understanding this relationship was crucial for policymakers seeking to promote economic recovery.

During the Great Depression,economists First Began Studying the Relationship Between