Question

Economic Challenges of the 20th Century Quick Check

Analyze why cotton and oil prices dropped in Texas at the beginning of the Great Depression. (1 point)

Farmers and refinery owners received no federal relief funding during the Hoover administration.

Farmers and refinery owners often went against government orders to produce high surpluses to make up for profit
losses.

Farmers and refinery owners were allowed by state and federal governments to produce large amounts of these natura
resources to make up for profit losses.

Farmers and refinery owners had to fire Black and Mexican American workers to provide jobs for White laborers.

O

Answer 1

Correct answer: Farmers and refinery owners were allowed by state and federal governments to produce large amounts of these natural resources to make up for profit losses.

Explanation: At the start of the Depression demand fell sharply while producers kept increasing output to try to maintain income, creating huge surpluses (a glut) in cotton and oil. With supply far exceeding demand, prices collapsed.