Which of the following statements is true of the Southern economy before the devastation of the Civil War?
  1. Westward expansion was threatening Southern economic dominance.
  2. It was gradually declining as machinery replaced a lot of manual labor.
  3. It could have easily replaced slave labor with free labor.
  4. It had consistently lagged behind the industrializing North.
  5. It was the third largest in the world.
Explanation
Answer: E - Prior to the Civil War, the Southern economy was the third largest in the world. While the North opposed slavery, the revenue that it created had historically been the backbone of the American economy. Although the North and West were showing significant economic growth in the era, they could not compete with the wealth concentrated in the hands of the Southern elite.
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