Consider the Period Between 1929 and the Depth of the Great

question 52

Multiple Choice

Consider the period between 1929 and the depth of the Great Depression in 1933.In terms of aggregate demand and aggregate supply, which of the following best describes what happened in Canada during this period?  

• A) The aggregate supply curve shifted inward with no change in the aggregate demand curve. 
• B) The aggregate demand curve shifted inward with no change in the aggregate supply curve. 
• C) The aggregate demand curve shifted outward with no change in the aggregate supply curve. 
• D) The aggregate supply curve shifted outward with no change in the aggregate demand curve.

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Definitions:

Equilibrium Output

The level of output at which the quantity supplied equals the quantity demanded, leading to a stable market condition without surplus or shortage.

Purely Competitive Market

A theoretical market structure characterized by an infinate number of buyers and sellers, homogeneous products, and no barriers to entry or exit.

Consumer Surplus

The distinction between what consumers are willing and able to allocate financially for a good or service, and what they actually allocate.

Purely Competitive Market

A purely competitive market is characterized by many buyers and sellers, homogenous products, and no barriers to entry or exit, leading to price taking behavior by individuals.