Question

In the 1930’s "bad psychology" in the business sector overwhelmed the attractiveness of lower interest rates and caused businesses to avoid borrowing money for Investment when they already had too much ___________ relative to AD.

a) money
b) capacity
c) profit
d) none of the above

Answer 1

Answer:

b) capacity

Explanation:

• In the 1930's the impact of the bad decision making and the uncertainties in business sectors brought an overwhelming downfall of the interest rates and stopped borrowing of money the decline of the earning capacity.

• As the period of the great economic recession took place and was called as the great depression that halted the consumer economy and crested suffering in the standard of living,