Question

During the Great Depression: Group of answer choices Only the United States encountered a high rate of unemployment. Prices rose rapidly. There was a shift of AD to the right. There was a shift of AD to the left. There was a shift of AS to the right.

Answer 1

During the Great Depression, the AD curve shifted to the left, representing decreased spending, high unemployment, and economic decline, indicating a global economic slowdown and not only a U.S. issue.

Step-by-step explanation:

During the Great Depression, the shift of AD to the right or left was fundamental in explaining why economic output increased or decreased. A shift of the aggregate demand (AD) curve to the right usually indicates increased spending and economic growth, leading to lower unemployment, as was the case during the housing bubble prior to the 2008-2009 Great Recession. In contrast, during the Great Depression, the AD curve shifted to the left, indicating decreased spending, growing unemployment, and overall economic decline. High unemployment rates soared, prices fell, and there was a drastic decrease in consumer and business spending, which all reflect a leftward shift of the AD curve. Additionally, other countries also experienced various degrees of economic hardship, not just the United States. Thus the correct answer to the student's question is: there was a shift of AD to the left.