Chapter 21, Problem 2BCQ

To determine

The similarities between the Great Depression and Great Recession and the rationality of Montgomery Ward to not expand at the time of depression.

Introduction: The Great depression was a period of economic collapse and downturn. It is often regarded as the world’s worst downturn in the economic history of mankind. It was largely caused by the profits corporations attempted to make while the average wage grew incrementally; this widened the income gap between the classes.

Recession, on the other hand, is characterized by a fall in the growth rate of gross domestic product (GDP) that lasts for a minimum of two months, which is the market reaction for a weak effective demand.