Question 5
MediumOriginal questionDuring the Great Depression of 1929, the main problem that classical economics could not explain was
Show the answer and explanation
CorrectNot quiteAnswer C
Correct answer: C
Explanation
Classical economists expected markets to clear, so unemployment should vanish on its own.
Instead, output and employment stayed low for years, which needed a theory of aggregate demand.
- Concept
- The Depression and macroeconomics
- Typical timeTypical
- 70 s
- Your timeYours
- —
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