In Answer to the Question,"Could They See the Great Depression

question 6

Multiple Choice

In answer to the question,"Could they see the Great Depression coming?",Hughes and Cain (2011) respond:

• A) No-Many people firmly believed that markets would self-correct and eventually recover with no government intervention
• B) No-many people seemed to believe that the prosperity of the 1920s would continue ?indefinitely because they believed that the economy was built to sustain high and stable ?rates of growth with minimal cyclical fluctuation when markets were permitted to clear themselves without government interference.
• C) Yes-in the late 1920s, a majority of economists reported and publicized that the economy?was becoming dangerously unbalanced and that a serious downturn was near.
• D) Yes and no-by the late 1920s, the economics profession was about equally split on the possibility of a serious downturn in the near future.

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Definitions:

Minimum Wage

The lowest legally enforced wage that employers can pay their employees, intended to ensure a minimum standard of living for workers.

Market Equilibrium

A state in a market where the quantity supplied equals the quantity demanded, resulting in no incentive for price changes.

Excess Supply

A situation in which the quantity of a good or service supplied is greater than the quantity demanded at the current price.

Rent Control

Government laws or policies that limit the amount landlords can charge for leasing residential property to protect tenants from steep rent increases.