Let’s read the passage carefully and find three clear reasons (circumstances) that led to the Great Depression.
Step 1: Look for causes mentioned in the text.
- The passage says new farm machinery in the 1920s let farmers produce too much → supply went up, prices dropped, profits fell.
- Then it says credit was introduced → people bought things on debt (like cars, radios). When the economy slowed, they couldn’t pay back loans.
- Companies made less profit → laid off workers → even fewer people could buy things → worse cycle.
- Foreign countries owed money to U.S. banks → when those countries struggled, U.S. banks lost money too.
- People believed stocks would keep going up → bought stocks on credit → stock market got overvalued.
- When panic hit, everyone sold stocks at once → Black Monday and Black Tuesday → stock values crashed by 25% in two days.
- By 1933, stock market was only 10% of what it had been.
Step 2: Pick THREE distinct circumstances from above that directly contributed.
Good choices:
1. Farmers produced too much because of new machines → prices dropped → profits fell.
2. People bought things (and stocks) on credit → when economy slowed, they couldn’t pay → banks and companies suffered.
3. Stock market grew too fast based on hope, not real value → when people panicked and sold, it crashed hard.
These are all clearly stated in the text and are major contributing factors.
Final Answer:
1. New farm machinery caused overproduction, which lowered prices and reduced farmers’ profits.
2. People bought goods and stocks on credit, and when the economy slowed, they couldn’t repay their debts.
3. The stock market became overvalued as people bought stocks hoping prices would keep rising, leading to a massive crash when panic selling began.
Parent Tip: Review the logic above to help your child master the concept of reading comprehension worksheet for 8th grade.
