How did this trend contribute to the Great Depression?
Understand the Problem
The question is asking about the ways in which a specific trend contributed to the Great Depression, likely referencing economic, political, or social factors. To answer this, we would discuss various trends, such as stock market speculation, industrial overproduction, or financial practices, and their roles in leading to the economic downturn.
Answer
Buying consumer items on credit led to initial demand rise but caused the Great Depression by creating defaults and underconsumption.
The trend of buying consumer items on credit contributed to the Great Depression by initially increasing consumer demand, but ultimately led to drops in profits and employment due to defaults on credit payments and underconsumption.
Answer for screen readers
The trend of buying consumer items on credit contributed to the Great Depression by initially increasing consumer demand, but ultimately led to drops in profits and employment due to defaults on credit payments and underconsumption.
More Information
Consumers buying goods on credit overextended their finances, leading to defaults and decreased spending, which strained the economy and exacerbated the Great Depression.
Tips
A common mistake is to overlook how the cycle of debt impacts wider economic stability, leading to reduced overall spending when consumers hit credit limits.
Sources
- How did this trend contribute to the Great Depression? - brainly.com
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