What happened during the Great Depression?
What will be an ideal response?
The Great Depression started in 1929, coinciding with a crash in the U.S. stock market. From 1929 to 1933, the crisis deepened as stock markets around the world continued to fall. At its bottom in 1933, the U.S. stock market was about 80 percent below its peak four years earlier. Millions of U.S. farmers and homeowners went bankrupt. Real GDP fell 26.3 percent below its 1929 level, and unemployment eventually rose from 3 percent in 1929 to 25 percent in 1933. From 1929 to 1933, the number of banks in the United States fell from 23,679 to 14,207. This decline was driven by failing banks that either went out of business altogether or were acquired by stronger competitors. Similar events occurred in almost all developed countries around the world, though the U.S. contraction was among the most severe.
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Refer to the scenario above. Infi Cor
A) $31 billion B) $21 billion C) $12 billion D) $9 billion
The fact that an economy always returns to the natural rate level of output is known as
A) the excess demand hypothesis. B) the price-adjustment mechanism. C) the self-correcting mechanism. D) the natural rate of unemployment.
What is the rationale for government provision of education?
a. Not all incomes are equal, but everyone has the right to education regardless of wealth. b. Potential students consider only their personal benefits gained from education, but the rest of society benefits, too. c. No education would be provided in the absence of government provision because everyone would consume it without paying. d. The cost of providing education for the entire public is too large. e. The government can provide education at a much lower cost than the private sector.
If fiscal policy makers increase aggregate demand in an attempt to decrease the unemployment rate below the natural rate of unemployment, then: a. the potential GDP will decrease
b. the potential GDP will increase. c. the only lasting impact of the policy is a higher price level. d. the only lasting impact of the policy is higher real GDP. e. the only lasting impact of the policy is lower real GDP.