Question

3. _____ Auto production, home sales, and road construction all slowed down significantly in the late 1920’s, which contributed to the stock market crash. Why did this have such a devastating effect?:
A. Those three industries only had a modest impact on the economy.
B. Those three industries were all essentially stopped because of damages done to the US during WWI.
C. Those three industries were all closely linked, thus, when they slowed, the entire economy slowed.
D. Many Americans lost interest in buying cars and/or homes.

Answer 1

Answer:

C

Explanation:

The reason the decrease of these sales was harmful to the economy was that they were rather expensive products that nobody really wanted to invest in. Now, the workers in all of the automobile factories along with construction workers and home builders had little to no source of income. This was a large part of the work force, and once their income slowed they became more conservative with money, causing a lack of flow in the economy and repeating the effect.