Using a graph, analyze the Great Depression from a Keynesian perspective. What happened to unemployment?
What will be an ideal response?
In the below figure, the equilibrium before the depression was at a price level of 100 and real GDP of $1 trillion. The depression was caused by a reduction in aggregate demand to AD1933. Because prices were not flexible, real GDP fell to $700 billion. The reduced output would be associated with a large increase in unemployment.
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The new growth theory examines the role of
A) technology in economic growth. B) natural resources in economic growth. C) exports in economic growth. D) government in economic growth.
The economic value which can be created by a transaction between two people, Ed (seller) and Luis (buyer), is $50 as Ed's opportunity cost of selling is $135 and Luis' valuation of the good is $185 . Suppose Ed and Luis do not speak the same language and Ed hires an interpreter who charges $2 per hour. Ed and Luis finally agree to a price of $160 . This implies:
a. Luis' valuation of the good will increase. b. Ed's opportunity cost will decline. c. economic value from the transaction will decline. d. Ed will receive to a lower benefit than Luis.
According to a 1977 amendment to the Federal Reserve Act of 1913, what are the goals the Fed should promote?
Voluntarism includes methods for dealing with pollution that
A. carry no legal authority. B. assume the public has been made aware of the environmental damage they are responsible for. C. involve trying to coerce polluters to reduce or eliminate pollution voluntarily. D. rely on neighborhood vigilantism.