Which of the following was a cause of the Great Depression?
A. increases in migrant workers
B. new music called jazz
C. Americans buying with credit
D. the prohibition of alcohol
This is probable very easy but i'm very confused i think it's A. but if someone can help me, i would appreciate it very much. Bye now.
👩🏿🏫 Writeacher and Snowflake. Thank you both for helping me i got a 87% on my unit test.
I think it's A as well.
Think again.
https://www.britannica.com/story/causes-of-the-great-depression
You are welcome... I guess?
5 Causes of The Great Depression
What caused the Great Depression, the worst economic depression in US history? It was not just one factor, but
instead a combination of domestic and worldwide conditions that led to the Great Depression. As such, there is no
agreed upon list of all its causes. Here instead is a list of the top reasons that historians and economists have cited as
causing the Great Depression.
The effects of the Great Depression were huge across the world. Not only did it lead to the New Deal in America but
more significantly, it was a direct cause of the rise of extremism in Germany leading to World War II.
1. Stock Market Crash of 1929 - Many believe erroneously that the stock market crash that occurred on Black
Tuesday, October 29, 1929 is one and the same with the Great Depression. In fact, it was one of the major causes that
led to the Great Depression. Two months after the original crash in October, stockholders had lost more than $40
billion dollars. Even though the stock market began to regain some of its losses, by the end of 1930, it just was not
enough and America truly entered what is called the Great Depression.
2. Bank Failures - Throughout the 1930s over 9,000 banks failed. Bank deposits were uninsured and thus as banks
failed people simply lost their savings. Surviving banks, unsure of the economic situation and concerned for their own
survival, stopped being as willing to create new loans. This exacerbated the situation leading to less and less
expenditures.
3. Reduction in Purchasing Across the Board - With the stock market crash and the fears of further economic woes,
individuals from all classes stopped purchasing items. This then led to a reduction in the number of items produced
and thus a reduction in the workforce. As people lost their jobs, they were unable to keep up with paying for items
they had bought through installment plans and their items were repossessed. More and more inventory began to
accumulate. The unemployment rate rose above 25% which meant, of course, even less spending to help alleviate the
economic situation.
4. American Economic Policy with Europe - As businesses began failing, the government created the Smoot-Hawley
Tariff in 1930 to help protect American companies. This charged a high tax for imports thereby leading to less trade
between America and foreign countries along with some economic retaliation.
5. Drought Conditions - While not a direct cause of the Great Depression, the drought that occurred in the
Mississippi Valley in 1930 was of such proportions that many could not even pay their taxes or other debts and had to
sell their farms for no profit to themselves.
The correct answer to the question is C. Americans buying with credit.
To understand why this was a cause of the Great Depression, we need to delve into some historical context. During the 1920s, there was a rapid expansion of credit in the United States. This meant that people were able to make purchases by borrowing money rather than using their own savings. The availability of credit encouraged Americans to buy more goods, including expensive items like cars and household appliances.
However, this increased reliance on credit also led to excessive debt. Many individuals and businesses accumulated large amounts of debt that they struggled to repay, especially when the economy took a downturn. When the stock market crashed in 1929, it triggered a chain reaction of events that eventually led to the Great Depression.
As a result of the crash, millions of Americans lost their jobs, businesses closed down, and people were unable to repay their loans. Banks, burdened with mounting bad debts, collapsed. The drastic decline in consumer spending and investment further deepened the economic crisis, as there was a lack of demand for goods and services.
Therefore, the widespread use of credit and the subsequent accumulation of debt played a significant role in the onset of the Great Depression.