Question

Which fact is the BEST piece of supporting evidence that overproduction and falling prices was a cause of the Great Depression?

A) In 1930 over 1,350 banks closed and customers lost all their savings.
B) The unemployment rate in 1929 was 3.2% and by 1933 there was a 25% unemployment rate.
Eliminate
C) In 1920 a bushel of wheat sold for $2.94, in 1929 it sold for $1.00 and by 1932 a bushel sold for .30 cents.
D) The stock market's dow average dropped over 23% over a two day period in October of 1929 and lost 90% of it's value by 1932.

Answer 1

The fact that is the BEST piece of supporting evidence that overproduction and falling prices was a cause of the Great Depression is that in 1920 a bushel of wheat sold for $2.94, in 1929 it sold for $1.00 and by 1932 a bushel sold for .30 cents. Farmers produced more as a result of WWI but as demand went down, they continued to overproduce which led to falling prices.

Answer 2

While all facts are relevant, it is clear under Galbraithinam economics that the price of wheat is a clear indicator of overproduction causing a drop in price. Soon after 1930, the great drought of 1932 put a finish to American farms ability to be profitable. The inability for many Americans to pay to feed their families exacerbated the farming crisis, creating a swirling spiral of declining return.