CLEP US History II

Answer: B - The prosperity of the 1920s led to an overproduction of goods, which subsequently caused the cost of consumer goods to be very low. Manufacturers put capital into goods that were not being sold, despite low prices, because there is a threshold to how much of any product will sell in a market, regardless of its price. The overstocked marketplace was a leading cause of the Depression, in addition to the stock market crash. Also, while some people amassed great wealth during the 1920s, it came at the expense of overall wealth equity, and working-class Americans had little money to spend in the marketplace. Their lack of purchasing power only worsened the supply-and-demand problems.