Question

Describe two economic problems hidden by the business boom of the 1920s

Answer 1

The prosperity masked societal problems, and business were not completely healthy, and as workers produced more in the same numbers of hours, business grew, sometimes absorbing smaller ones, with this growth, the difference in income between business managers and workers grew wider. The mining companies, railroads, and farms were suffering. Second, consumer debts rose to alarming levels. Business helped to promote consumer spending by allowing customers to buy on credit.

Answer 2

One economic problem was that businesses were not as healthy. People started losing money because they had numerous investors and they couldn't find a way to pay them back because they couldn't earn as much as they received in investments which caused investors to lose money in reality which harmed the businesses.

Another is that the consumers were indebted more than it was normal. People were spending more and more money and they in reality didn't have this money earned so the debt started increasing dramatically and when they couldn't pay back the debts the bubble burst and an economic crisis was introduced.