The Money Hypothesis Suggests That the Great Depression Was Caused

question 13

Multiple Choice

The money hypothesis suggests that the Great Depression was caused by a:

• A) leftward shift in the IS curve.
• B) rightward shift in the IS curve.
• C) leftward shift in the LM curve.
• D) rightward shift in the LM curve.

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Definitions:

Long Bonds

Bonds with a long duration to maturity, typically more than 10 years, and are sensitive to interest rate changes.

Period

A length or portion of time.

Capital Gains Yield

The part of an investment's total return that comes from the increase in its value, not including dividends or interest earnings.

Total Return

The overall gain or loss on an investment over a specific period, including both capital appreciation and dividends or interest, expressed as a percentage.