Question

How did overproduction of U.S. goods by manufacturers contribute to the Great

Depression?

A. by causing an increase in prices of goods in foreign markets

B. by resulting in large unsold inventories due to market saturation

C. by encouraging businesses to employ more workers

D. by prompting businesses to build factories in more locations

Answer 1

The overproduction of U.S. goods by manufacturers contributed to the Great Depression by resulting in large unsold inventories due to market saturation. This excess supply caused a decrease in demand and led to a decrease in production and employment. The decrease in production and employment, in turn, caused prices to drop, leading to further reductions in demand and the economic downturn that characterized the Great Depression.