a Identify any specific shocks supply demand positive negati

a) Identify any specific shocks (supply, demand, positive, negative) that may have been affecting the economy of the year 1937-1938. b) What phase of the business cycle do you believe the year 1937-38 was in?

Solution

a) During the year 1937-1938, there was a negative demand shock and the economy was under the great depression. at that time the business sentiments were down and investment and demand were at the bottom.

b) The economy was experiencing \"trough\" during that time period. After that, the business sentiments and improved and the economy start growing.