Question

Which of the following describes the Panics of 1873 and 1893?

Millions of wealthy people frantically moved into urban suburbs.
The government decided to print more money.
The economy took a downturn because of overproduction, declining stock markets, and deflation.
The government decided to play a limited role in regulating trade.

Answer 1

The answer is C) The economy took a downturn because of overproduction, declining stock markets, and deflation


The Panic started due to economic problems in Europe, which reached the United States and impacted the The Northern Pacific Railway company, which then had an impact on government debt and eventually the failure of several banks.

Eventually, a chain reaction was created where jobs were lost, factories shut and a surge in unemployment.

The events started from the crashing of the Vienna Stock Exchange and eventually led to economic downturn in the great British Empire and the closure of the New York Stock Exchange for 10 days.