Question

Predict how the economic changes during the roaring twenties could possible lead to an economic disaster

Answer 1

The Roaring Twenties was a great golden age in America, but ironically, led to its greatest downfall.

Lots of new things became popular among all Americans in the 20's; automobiles, radio, silent movies, etc. People were spending money left and right on these things, and were becoming very materialized. So why am I talking about Americans buying boatloads of stuff they didn't need? Well, this was one of the prime causes of the Great Depression. Americans started buying on margin, or buying with credit; buy now, pay later. People bought so much like this, that they had to borrow lots of money from the banks. As this went on, it built up slowly, and led into buying stocks on margin. This eventually led to the Stock Market Crash of 1929. As people ran to the banks to withdraw all their money, the banks failed, and people lost all their savings in the blink of an eye. Manufacturers soon started producing less and laying off workers as jobs became a demand, and ended up causing the intense unemployment rates throughout the country. And finally, farmers suffered as a massive drought hit the Mississippi Valley in 1930, which created the infamous Dust Bowl.