Need help with this. Please show how to adjust the AS and AD lines. Thanks! In the late 1920s and early 1930s, the U.S. economy was caught in a downward spiral that would later become known as the Great Depression. Output and prices both plummeted as unemployment skyrocketed and factories lay idle.The following graph shows the aggregate demand (AD) and aggregate supply (AS) curves for the United States in 1929.**Graph Explanation:**- The vertical axis represents the **Price Level (CPI)**.- The horizontal axis represents **Real GDP (Billions of dollars)**.- The blue line is the **Aggregate Demand (AD)** curve, which slopes downwards from left to right.- The orange line is the **Aggregate Supply (AS)** curve, which slopes upwards from left to right.- The intersection of the AD and AS curves indicates the equilibrium point.**Instruction:**Shift one of the curves on the graph to illustrate the impact of the Great Depression.

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ed help with this. Please show how to adjust the AS and AD lines. Thanks

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Need help with this. Please show how to adjust the AS and AD lines. Thanks!

In the late 1920s and early 1930s, the U.S. economy was caught in a downward spiral that would later become known as the Great Depression. Output and prices both plummeted as unemployment skyrocketed and factories lay idle.

The following graph shows the aggregate demand (AD) and aggregate supply (AS) curves for the United States in 1929.

**Graph Explanation:**
- The vertical axis represents the **Price Level (CPI)**.
- The horizontal axis represents **Real GDP (Billions of dollars)**.
- The blue line is the **Aggregate Demand (AD)** curve, which slopes downwards from left to right.
- The orange line is the **Aggregate Supply (AS)** curve, which slopes upwards from left to right.
- The intersection of the AD and AS curves indicates the equilibrium point.

**Instruction:**
Shift one of the curves on the graph to illustrate the impact of the Great Depression.

Expert Solution

Step 1

The great depression was a result of fall in Aggregate demand in the economy.

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