Multiple Choice. Look at the diagram and answer the question.

Question

Consumer debts accumulate, forcing people to stop
making new purchases.
Consumer demand declines, causing manufacturers
to reduce production.
Manufacturers lay off employees, causing the
unemployment rate to rise.
What does the diagram illustrate?
the effects of tariffs on the stability of the economy during the Great
Depression
the effects of the overextension of credit on the severity of the Great
Depression
the effects of buying on margin on creating the bull market preceding the Great
Depression
the effects of stock speculation on the stock market crash that started the
Great Depression

Answer 1

The effects of the overextension of credit on the severity of the Great Depression.