Author Question: The U.S. and other industrializing nations depended heavily on international trade. Indicate ... (Read 117 times)

nelaaney · **on:** Jun 30, 2018

The U.S. and other industrializing nations depended heavily on international trade.

Indicate whether the statement is true or false

Question 2

During the recession of 2008, the U.S.experienced lower real interest rates at the same time investment and GDP were falling.

How would a Classical economist explain this recession? Provide a graph of the Classical capital market to illustrate your arguments.

SamMuagrove · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

False (Unlike other nations, the U.S. did not.)

Answer to Question 2

This must have been caused by a fall in investment which reduced the capital stock and aggregate supply.