Question

In which of the following ways did the 1920s wealth gap contribute to the start of the Great Depression?
(1 point)

The wealth gap led to a decline in stock investment during the 1920s.

A concentration of wealth led to less spending across the economy.

Many of the rural poor were forced into subsistence farming.

The wealth gap led to heavy emigration from the United States and shrinkage of the economy.

Answer 1

A concentration of wealth led to less spending across the economy.

Because income was concentrated among the wealthy—who saved more and spent proportionally less—mass consumer demand was weaker, contributing to overproduction, rising inventories, and economic instability that helped precipitate the Depression.