What is overproduction in the context of the Great Depression's causes?
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Correct answer: Businesses and farms produced more goods than consumers could afford to buy
Overproduction occurred when farms and factories produced more than the market could absorb. As unsold goods piled up, businesses cut production, laid off workers, and reduced wages.
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More Causes of the Great Depression questions
- How did consumer credit in the 1920s contribute to economic weakness?
- What happened when many banks failed during the early Great Depression?
- Why did bank runs worsen the financial crisis?
- Which international factor helped spread the Great Depression globally?
- How did high tariffs such as the Smoot-Hawley Tariff worsen the Depression?
- Which statement best describes the Federal Reserve's role in the early Depression?