Changes in the economy during the 1920s played a big role in bringing about the Great Depression. Here are some important points to understand:
Stock Market Speculation: Stock prices went up a lot from 1921 to 1929. They tripled! The Dow Jones Industrial Average, which measures stock prices, hit a record high of $381 in September 1929.
Overproduction: Factories, especially those making cars and other products, made more than people wanted to buy. By 1929, this led to a loss of $2 billion in inventory value.
Income Inequality: In 1929, the wealth was very uneven. The richest 1% of people had 2,000 a year.
Bank Failures: Many banks struggled during this time. Around 600 banks went out of business in 1929. This caused problems with credit, making the economic situation worse.
Changes in the economy during the 1920s played a big role in bringing about the Great Depression. Here are some important points to understand:
Stock Market Speculation: Stock prices went up a lot from 1921 to 1929. They tripled! The Dow Jones Industrial Average, which measures stock prices, hit a record high of $381 in September 1929.
Overproduction: Factories, especially those making cars and other products, made more than people wanted to buy. By 1929, this led to a loss of $2 billion in inventory value.
Income Inequality: In 1929, the wealth was very uneven. The richest 1% of people had 2,000 a year.
Bank Failures: Many banks struggled during this time. Around 600 banks went out of business in 1929. This caused problems with credit, making the economic situation worse.