Which of the following best summarizes American economic issues at the end of the 1920s?
A. overproduction, too many credit purchases, stock speculation, and bank failures
B. a decrease in credit to consumers, overproduction, stock speculation, and bank failures
C. underproduction, too many credit purchases, stock speculation, and bank failures
D. overproduction, too many credit purchases, stock speculation, and powerful banks
Answers
Which of the following best summarizes American economic issues at the end of the 1920s?
A. overproduction, too many credit purchases, stock speculation, and bank failures
B. a decrease in credit to consumers, overproduction, stock speculation, and bank failures
C. underproduction, too many credit purchases, stock speculation, and bank failures
✔ D. overproduction, too many credit purchases, stock speculation, and powerful banks
Explanation :-
→ Following World War I, the US was the only economy able to produce and the consumer boom together created a large production boom. However, the production did not slow even when demand decreased.
→ Many of the consumer purchases was done so on credit. When people were laid off of their jobs and the market began to sink, individuals were not able to pay their credit payments which contributed to bank failures.
→ Stock speculation also contributed to bank failure. Stock speculation is buying stocks on credit and is a risk but many believed would pay off in an economic boom.
Answer:
It made the economy weaker. How did the overproduction of goods in the 1920s affect consumer prices, and in turn, the economy? Consumer demand decreased, prices decreased, and the economy slowed.