Which of the following was a sign of an unsound economy during the 1920s?
a. personal debt was decreasing
b. wages were keeping pace with production
c. more goods were being produced than consumers could buy
d. The Dow Jones Industrial Average was steady.
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Check this array of statistics.
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To determine which of the options provided was a sign of an unsound economy during the 1920s, let's consider each option:
a. Personal debt was decreasing: A decreasing personal debt would generally indicate a healthier economy, as it implies that individuals are managing their finances well and not relying extensively on borrowed money. Therefore, this option is unlikely to be a sign of an unsound economy.
b. Wages were keeping pace with production: If wages were keeping pace with production, it could be seen as a positive sign, as it suggests that workers are being fairly compensated for their productivity. While wage stagnation can be a concern, it does not necessarily indicate an unsound economy.
c. More goods were being produced than consumers could buy: This option indicates an imbalance between production and consumption, where the supply of goods exceeds the demand from consumers. Such a situation can lead to surplus inventories, reduced prices, and potential financial strain on businesses, suggesting an unsound economy.
d. The Dow Jones Industrial Average was steady: The Dow Jones Industrial Average (DJIA) is an index that measures the stock market's performance by tracking the prices of 30 large, publicly-owned companies. A steady DJIA could indicate stability in the stock market, but it does not necessarily reflect the overall health of the economy. For example, the stock market can sometimes be disconnected from the real economy, and stability in the DJIA does not necessarily mean that other economic indicators are positive.
Considering the above analysis, option c stands out as the sign of an unsound economy during the 1920s, as it suggests an imbalance between production and consumption.