Question

which of these practices contributed to the great depression in the united states?
a. automobile factories produced only as many cars as the government authorized.
b. many americans quit their jobs because the government enacted social welfare programs.
c. americans invested and spent beyond their means by taking out large loans.
d. factories produced fewer goods in order to maintain a high demand.

Explanation:

• Option A: Automobile factories were not restricted by the government in this way before the Great Depression. Mass - production was common, and there was no such authorization - based production limit.
• Option B: Social welfare programs were not widespread enough before the Great Depression to cause people to quit their jobs. In fact, the lack of social welfare was a problem during the Depression.
• Option C: In the 1920s, Americans engaged in excessive borrowing for consumption (e.g., buying cars on installment) and for stock market speculation (buying stocks on margin). When the stock market crashed in 1929, and the economy started to decline, these excessive debts led to a financial crisis, bank failures, and a downward spiral in the economy.
• Option D: Factories were over - producing in the 1920s. There was an oversupply of goods, not an artificial restriction of production to maintain demand.

Answer:

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