Question

Which occurred during the Great Depression? Check all that apply.

increased aggregate demand
new forms of money
falling wages
increasing prices
plummeting growth
surging unemployment

Answer 1

Check all that apply:

- falling wages — Yes. Wages fell as demand for labor collapsed.
- plummeting growth — Yes. Real GDP fell sharply during the Depression.
- surging unemployment — Yes. Unemployment rose to very high levels (about 25% in the U.S.).

Not correct or not generally true:

- increased aggregate demand — No. Aggregate demand fell, causing the downturn.
- increasing prices — No. The period was marked by deflation (falling prices), not inflation.
- new forms of money — Not generally. There were some local scrip experiments and the U.S. left the gold standard, but “new forms of money” is not a defining, widespread feature of the Depression.