What Is the Best Description of the US Economy from 1929-1940

question 35

Multiple Choice

What is the best description of the US economy from 1929-1940?

• A) GNP decreased continually during the greatest Depression our nation has known.
• B) The economy suffered a large drop from 1929-1933, but then grew steadily through WW II.
• C) The economy suffered an initial drop, a four-year expansion and then another drop towards the end of the decade.
• D) The unemployment rate increased steadily throughout the period.

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Definitions:

Balanced Budget Amendment

A proposed federal constitutional rule requiring that the government not spend more than its income in a fiscal year, aimed at ensuring fiscal responsibility.

Equilibrium GDP

Equilibrium GDP, or Gross Domestic Product, is the level of output where aggregate demand equals aggregate supply, resulting in no unintended changes in inventories.

Inflationary Gap

This term reflects the difference between the actual output of an economy and the maximum potential output it could achieve with full employment, often indicating inflation pressures.

Equilibrium GDP

The level of Gross Domestic Product at which the total quantity of goods and services produced equals the total quantity of goods and services purchased.