Which of the following by itself is consistent with the directions that the price level and real GDP changed at the onset of the Great Depression?

Question

a.

aggregate demand shifted left
b.

aggregate supply shifted right
c.

aggregate supply shifted left
d.

aggregate demand shifted right

Answer 1

The correct answer is:

a. aggregate demand shifted left

During the onset of the Great Depression, there was a significant decrease in aggregate demand due to factors like a drop in consumer confidence, stock market crash, and reduced spending. This leftward shift in aggregate demand typically leads to both a decrease in the price level and a decrease in real GDP, which aligns with what happened during the Great Depression.