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The Great Depression Began Following a Stock Market Crash and Continued

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Essay

The Great Depression began following a stock market crash and continued as thousands of banks failed; during this time,the government offered little assistance.The government raised taxes and refused to let the money supply increase.Household wealth and expected income both decreased.Using the aggregate demand and aggregate supply model,explain what effect these events had on the economy.


Definitions:

Linear

Describes a relationship or function that represents a straight line when graphed, indicating a constant rate of change.

Positive Economics

The branch of economics that concerns the description and explanation of economic phenomena, focusing on facts and cause-and-effect relationships without making judgments.

Normative Economics

The branch of economic analysis that makes prescriptions about the way the economy should work.

Allocatively Efficient

A situation where resources are distributed in a way that maximizes the net benefit to society, often where marginal cost equals marginal benefit.

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