Question

2.2.2 quiz: postwar years and the global depression
question 8 of 10
which of these practices contributed to the great depression in the united states?
a. americans invested and spent beyond their means by taking out large loans.
b. factories produced fewer goods in order to maintain a high demand.
c. automobile factories produced only as many cars as the government authorized.

Explanation:

To determine the correct answer, we analyze each option:

• Option A: During the lead - up to the Great Depression, many Americans engaged in speculative investing and excessive spending by taking out large loans (such as in the stock market and consumer credit). When the market crashed and economic conditions worsened, they were unable to repay these loans, which contributed to the financial collapse and the Great Depression.
• Option B: In the 1920s, factories were actually overproducing goods. There was a surplus of products, which led to a drop in prices and eventually to layoffs as demand couldn't keep up with supply. So producing fewer goods to maintain demand is not a cause of the Great Depression.
• Option C: There was no government authorization system for automobile production in the way described. Automobile production was driven by market forces (and overproduction in some cases), so this option is incorrect.

Answer:

A. Americans invested and spent beyond their means by taking out large loans.