Asked by
Louisse Cervo
on Dec 11, 2024
Verified
Which one of the following factors contributed to the decline in real output during the Great Depression?
A) Deflation, which changed the terms of long-term contracts and discouraged long-term exchange.
B) Inflation, which reduced the value of the dollar and eroded the savings of the elderly.
C) Stable monetary policy, which caused business decision makers to lose confidence in the Fed's ability to fine-tune the economy.
D) Establishment of the Federal Deposit Insurance Corporation.
Deflation
A decrease in the general price level of goods and services, often indicating a contraction in the overall economy.
Real Output
The quantity of goods and services produced in an economy, adjusted for inflation, representing true productivity.
Long-Term Contracts
Agreements between parties that last over an extended period, often used to secure pricing, terms, and conditions.
- Recognize the contributors to the depth and persistence of the Great Depression.
Verified Answer
BC
Learning Objectives
- Recognize the contributors to the depth and persistence of the Great Depression.