Question

During the Great Depression, the economy experienced

		inflation
		disinflation
		deflation
		hyper-inflation

During the Great Depression, output growth

		increased at a slower than normal rate
		was negative for 4 quarters before turning positive
		was negative for 4 years before turning positive
		didn't decline as much as during the Great Recession

While there is no "standard" for distinguishing an economic depression from a recession, in general economists would look at the magnitude of which of the following

		real GDP decline
		unemployment increase
		both of the above
		only real GDP declines

Answer 1

Answer to question 1 is option c) deflation

This is because , Deflation is the economic term used to describe the drop in prices for goods and services. Deflation slows down economic growth. It normally takes place during times of economic uncertainty when there is demand for goods and services is lower, along with higher levels of unemployment. Whereas , Disinflation occurs when price inflation slows down temporarily. Unlike inflation and deflation, disinflation is the change in the rate of inflation.

Answer to question 2 is option c) was negative for 4 years before turning positive.

Answer to question 3 is option c) both of the above

This is because , both of factors are considered