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Causes of the Great Depression · US History

How did unequal distribution of income contribute to the Great Depression?

  1. It made every single American worker equally wealthy regardless of occupation or background
  2. It completely eliminated the need for any consumer credit or loans
  3. It caused all factories nationwide to produce only food products
  4. Many consumers lacked enough purchasing power to keep buying the goods businesses produced
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Correct answer: Many consumers lacked enough purchasing power to keep buying the goods businesses produced

During the 1920s, wealth was concentrated among a smaller portion of the population. Many families relied on credit or could not afford enough goods, weakening consumer demand.

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