Question

How did the overproduction of goods in the 1920s affect consumer prices, and in turn, the economy?
Consumer demand increased, prices decreased, and the economy grew.
Prices increased along with consumer demand, and the economy grew.
Consumer demand decreased, prices decreased, and the economy slowed.
Prices increased, consumer demand decreased, and the economy grew.

Answer 1

Consumer demand decreased, prices decreased, and the economy slowed.

Overproduction created surpluses that pushed prices down. Firms cut back production and laid off workers, reducing incomes and consumer demand further, which slowed the economy and contributed to the onset of the Great Depression.