The task asks you to
identify three of the circumstances that contributed to the Great Depression, based on the provided reading passage.
Let’s analyze the passage and extract the key causes mentioned:
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Key Points from the Passage:
1.
Introduction of new farm machinery in the 1920s → Increased agricultural production → Supply exceeded demand → Prices fell → Farmers' profits diminished.
2.
Credit was introduced into the economy → People took on debt to buy expensive items (cars, appliances, radios) → When profits dropped, people couldn’t pay back debts.
3.
Overproduction and overconfidence in the stock market → The stock market grew by 600% between 1921 and 1929, but this growth was not supported by real company earnings → People bought stocks on credit (speculation).
4.
Stock market crash on Black Tuesday (October 28–29, 1929) → Stock values dropped 23%, then continued falling → By 1933, the stock market was only 10% of its former value.
5.
Banks began to fail → People lost their savings → No government safety net at the time → Further weakened the economy.
6.
Factories closed and workers were laid off → Reduced income → Less spending → Economic downturn deepened.
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Three Circumstances That Contributed to the Great Depression:
1.
Overproduction in agriculture due to new farm machinery
→ This caused supply to exceed demand, leading to falling prices and reduced farmer incomes.
2.
Widespread use of credit for consumer purchases
→ People bought goods on credit; when the economy weakened, they couldn't repay loans, leading to financial collapse.
3.
Speculative stock market bubble and the crash of 1929 (Black Tuesday)
→ Stocks were bought on margin (credit), and when prices crashed, investors lost money, banks failed, and confidence in the economy collapsed.
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Final Answer:
1. Overproduction in agriculture due to new farm machinery
2. Widespread use of credit for consumer purchases
3. Speculative stock market bubble and the 1929 crash
These three factors are clearly highlighted in the passage as major contributors to the Great Depression.
Parent Tip: Review the logic above to help your child master the concept of 8th grade comprehension worksheet.
