Consider the information in the following table for the first two years of the Great Depression (where the values for real GDP and potential GDP are in 2012 dollars).

a. The table shows that something happened during 1929–1930 that has not happened during the recessions of the past 50 years. What is it? 

b. Draw a dynamic aggregate demand and aggregate supply graph to illustrate what happened during these years. Your graph should contain the AD, SRAS, and LRAS curves for both 1929 and 1930 and should indicate the short-run macroeconomic equilibrium for each year and the directions in which the curves shifted.  

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Year Actual Real GDP 1929 $1,109.4 billion 1930 1,015.1 billion Potential GDP Price Level $1,056.6 billion 1,148.9 billion 9.4 9.1