Underconsumption was caused by which of the following?
A) Farmers and workers built up large savings accounts that drew excessive interest.
B) Due to falling wages and rising unemployment, many middle- and lower-income Americans could no longer buy the products they needed and wanted.
C) A shortage of labor caused a drastic reduction in industrial production.
D) The public continually demanded consumer goods of a higher and higher quality.

Question

Quizplus · Accepted Answer

Underconsumption occurs when people are not buying enough goods and services to keep the economy functioning properly. This can happen when people do not have enough income to buy the products they need and want. This was the case during the Great Depression when falling wages and rising unemployment left many middle- and lower-income Americans unable to afford the goods and services they needed, causing a decrease in demand and ultimately leading to a decline in production and economic activity. A, C, and D are incorrect because they do not accurately describe the causes of underconsumption during the Great Depression.

Underconsumption Was Caused by Which of the Following