Question

A Bathtub model of the start of the Great Depression would show the water level becoming lower with Investment inflow being less than Savings leakage and, therefore, quantity of AD being ______________ quantity of AS..

Answer 1

LESSER THAN

Step-by-step explanation:

During the Great Depression, it was a period of recession that meant that investments were low and less than savings which meant that 'household' was unwilling to invest its money as it had lost confidence in the American economy. This will lead to Aggregate Demand being Lesser than Aggregate Supply as consumption fell drastically during the great depression