Final answer:
High taxes and debts in an unstable currency were the main factors causing economic distress in Massachusetts during the 1780s, leading to events like Shays' Rebellion and widespread discontent among farmers and war veterans.
Step-by-step explanation:
The economic distress in Massachusetts during the 1780s was predominantly caused by a combination of high taxes and inability to pay off debts due to unstable paper currency. Farmers, many of whom were Revolutionary War veterans, struggled as they faced the threat of losing their homes because they couldn't afford the high taxes and fees. Shays' Rebellion was a direct response to this economic crisis, where indebted farmers, led by Daniel Shays, attempted to forcibly oppose the state's high taxes and economic policies.
Other contributing factors included the lack of regulation of interstate commerce by the central government, which allowed British merchants to flood the market with inexpensive goods, thereby undercutting American producers. Furthermore, the federal government's laissez-faire approach and reluctance to print additional paper currency exacerbated the economic troubles of citizens and businesses alike.