Question

Question 19 1 pts When a change in the price level leads to a change in the interest rate and thus a change in the quantity of aggregate demand, it is called theeffect. savings interest rate O price wealth o output 4 Previous Next Question 21 1 pts The Great Depression lasted longer and was deeper than the average recession, in part, because the government reduced tax rates and increased spending. the government reduced barriers to trade. there was a stock market crash at the beginning of the depression. o the government increased the money supply and reduced interest rates O stock prices increased during the Great Depression. 4 Previous Next Question 22 1 pts During the Great Recession, long-run aggregate supply decreased. This was caused by a(n) O advancement in technology O breakdown in the loanable funds market. Oincrease in the U.S. labor force. O decrease in income and business tax rates. O increase in immigration to the United States.

Answer 1

Question 19

When interest rate in the economy changes due to the change in the price level and due to this there is change in the quantity of aggregate demand.

This phenomenon is referred to as interest rate effect.

Hence, the correct answer is the option (2) [Interest rate].

Question 21

The Great Depression was considered to be the most brutal recession in the world economic history.

This recession was deeper and lasted longer than the average recession because there was a stock market crash at the beginning of the Great Depression.

Hence, the correct answer is the option (3) [There was a stock market crash at the beginning of the depression].

Question 22

The stock market crash at the beginning of the Great Depression has resulted in the financial crisis.

This has resulted in the complete breakdown of the loanable funds market resulted in a decrease in both long run aggregate supply and the aggregate demand.

Hence, the correct answer is the option (2) [Breakdown in the loanable funds market].