Multiple choice. Read the list and answer the question.
•unequal distribution of income.
•over taxation of consumer credit.
•overproduction of consumer goods.
How did these factors affect the economy at the beginning of the great depression?
a) Unequal distribution of income
b) Over taxation of consumer credit
c) Overproduction of consumer goods
The correct answer is: All of the above.
All three factors contributed to the economic downturn at the beginning of the Great Depression. The unequal distribution of income meant that a large portion of the population had limited purchasing power, while a small fraction controlled a significant portion of the wealth. Over taxation of consumer credit made it difficult for people to access loans and make purchases, further dampening consumer spending. Lastly, overproduction of consumer goods led to excessive inventories and a lack of demand, which eventually resulted in widespread layoffs and business closures.