Question

Which of the following statement(s) is/are true about the Great Depression?

• A. There was a decline in the demand of goods which led to a decline in production.
• B. There was a decline in demand due to decline in production.
• C. The prices of goods were low throughout the Great Depression.
• D. The Great Depression resulted in massive unemployment.

Answer 1

Answer: (A), (D)

The correct options are
A There was a decline in the demand of goods which led to a decline in production.
D The Great Depression resulted in massive unemployment.

During the Great Depression, there was a decline in demand of goods which led to decline in production and shut down of factories. This resulted in lesser production. As the availability of goods in the market became less due to lesser production, the prices began to increase. People’s purchasing power began to reduce due to the high cost of goods. The cyclical effect of the demand and price fluctuations caused massive unemployment. 25% of people in the US and 33% of people in other countries of the world were unemployed.