Long Term Reasons for The End of Prosperity Flashcards
How can the reasons for the end of prosperity be summed up in three points?
Over Production.
Falling demand for consumer goods.
Boom in land and property values.
What was a contributing factor to overproduction?
The imposition of foreign tariffs on American goods.
What were the greatest causes for a fall in consumer demand at the end of the 1920s?
Widening inequality.
The USA’s inability to sell of surpless products abroad.
The failure of Europeans to return American loans.
What was the income of over 50% of American families in the 1920s?
Less than $2,000 a year.
How did a boom in property values during the 1920s ultimately cause catastrophic recession?
The necessity for borrowing in order to buy such expensive goods, with the faith that in a few years they could sell their buildings and gain it back, ultimately meant that when the economy floundered millions were left in debt.
When and where did house prices first begin to fall sharply?
In Florida in 1926.
Did anyone take note of Florida’s plunge in house prices as a harbinger to economic downturn.
No, it was ignored.
