Question

Which of the following statements best describes the causes of the Great Depression?

After World War I, the United States struggled to regain economic stability in industrial and manufacturing sectors, eventually leading to the stock market crash.
Foreign nations never paid their war debts to the United States, weakening the banking industry and making the government raise taxes so high that it hurt the economy.
Stern domestic policy measures and postwar labor shortages hurt consumer confidence and restricted market growth.
A decade of overproduction, wealth inequality, market speculation, and personal debt led to the stock market crash and widespread unemployment.

Answer 1

The Great Depression was caused by a multitude of factors, including overproduction, wealth inequality, market speculation, and personal debt, culminating in the stock market crash of 1929 and leading to widespread unemployment and economic hardship. The correct statement is A decade of overproduction, wealth inequality, market speculation, and personal debt led to the stock market crash and widespread unemployment.

Step-by-step explanation:

The statement that best describes the causes of the Great Depression is 'A decade of overproduction, wealth inequality, market speculation, and personal debt led to the stock market crash and widespread unemployment.' This encompasses the complex interplay of factors that led to the economic downturn.

The Great Depression had multiple causes including the speculative bubble in the stock market, flawed banking practices, international economic issues, poor income distribution, and the declining consumer demand which had begun in the mid- to late 1920s.

The stock market crash of 1929 was a triggering event but not the sole cause of the Great Depression. Policies such as the Hawley-Smoot Tariff Act also worsened the situation by stifling international trade, leading to a dramatic drop in GDP and soaring unemployment rates not only in the United States but also in Europe.