Question

Which of the following was NOT an underlying cause of the Great Depression? overproduction of goods meant that supply was greater than demand stock market speculation was so severe that people borrowed money to buy stocks the government made it difficult for Americans to purchase homes and consumer goods on credit many ordinary Americans were in debt, and workers often did not make enough money to buy the products they made

Answer 1

The longest, deepest economic crisis in US history was known as the Great Depression. It started when the US stock market crashed in 1929 that sets the chain of unfortunate events. 

The following are the underlying reasons that contributed to the Great Depression. 

1. American firms reinvested much of their earned profits into business expansions that reach the bubble point, where workers can no longer continue to do the additional workload. This leads to the greater increase in corporate profits but incremental increase in workers wages, thus widening the distribution of wealth. (Overproduction of goods.)

2. Assets were owned by the richest 1% of Americans that only comprise 1/3 of their population. These wealthy individuals tend to save their money instead of making it flow in the economy. On the other hand, middle-class Americans stretched their debt capacities by purchasing automobiles and household appliances on installment plans. (Ordinary Americans were in debt.)

3. Bank operations have no guarantees and were not fully regulated. Thus those who made reckless speculations were allowed by the bank to borrow money and buy stocks. (Severe speculations caused people to borrow money and buy stocks).

4. Agricultural prices were already low in the 1920s giving farmers a hard time to recover. When the Depression spread across the Atlantic, fewer American products were bought, continuing into the Depression. 

The only underlying cause not mentioned is this: Government made it difficult for the Americans to purchase homes and consumer goods on credit. So that would be the answer.