"From 1860 to 1900 the U.S. population more than doubled. To feed this growing population, the number of farms tripled. With modern machines, farmers in 1900 could harvest a bushel of wheat almost 20 times faster than they could in 1830.
The combination of more farms and greater productivity, however, led to overproduction. Overproduction resulted in lower prices for crops. As their incomes decreased, many farmers found it difficult to pay bills. Farmers who could not make their mortgage payments lost their farms and homes. Many of these homeless farmers became tenant farmers who worked land owned by others. By 1880 one-fourth of all farms were rented by tenants, and the number continued to grow."
According to the passage above, what likely caused many farmers to lose money?
increased demand
increased productivity
too much rain
deflation
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According to the passage, many farmers likely lost money due to "overproduction," which resulted in lower prices for crops. This aligns with the concept of deflation, where an increase in supply (in this case, crops) leads to a decrease in prices. Therefore, the correct answer is:
deflation.
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1 answer