THE GREAT DEPRESSION 1929 1940
THE GREAT DEPRESSION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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farmers had huge surpluses of crops but demand for them decreased drastically so they went into debt
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acquiring a line of credit was easy, but it caused more debt for people who could not make payments
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wealthy people grew wealthier and had money to spend on consumer products, but this spending was not enough to keep the economy booming
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all of the above
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Detailed explanation-1: -The Great Depression was partly caused by the great inequality between the rich who accounted for a third of all wealth and the poor who had no savings at all. As the economy worsened many lost their fortunes, and some members of high society were forced to curb their extravagant lifestyles.
Detailed explanation-2: -This imbalance of wealth created an unstable economy. The excessive speculation in the late 1920’s kept the stock market artificially high, but eventually lead to large market crashes. These market crashes, combined with the maldistribution of wealth, caused the American economy to capsize.
Detailed explanation-3: -According to a study done by the Brookings Institute, in 1929 the top 0.1% of Americans had a combined income equal to the bottom 42%2. That same top 0.1% of Americans in 1929 controlled 34% of all savings, while 80% of Americans had no savings at all.