What were some of the primary causes of the Great Depression?

• A. Increased wages and government spending
• B. Stock market crashes and drought
• C. Technological advancements and overproduction
• D. Territorial expansion and high employment

Answer: (B)

The Great Depression, which began in 1929 and affected economies worldwide, had multiple interconnected causes. One of the primary causes was indeed the stock market crash of 1929. This catastrophic event significantly undermined public confidence in the economy and led to a drastic reduction in consumer spending and investment. The immediate aftermath saw banks fail, businesses close, and widespread unemployment ensue as financial instability worsened.

The impact of drought, particularly through the Dust Bowl in the United States, also played a severe role in exacerbating the economic downturn. Agricultural production was devastated, leading to food shortages and additional hardship for farmers and rural communities. This environmental disaster compounded the economic issues initiated by the stock market crash, resulting in a profound effect on both the agricultural sector and the overall economy.

The other options do not accurately represent the major factors that contributed to the onset of the Great Depression. Increased wages and government spending would typically help stimulate the economy, while technological advancements, despite their benefits, did not directly lead to the economic collapse. Similarly, territorial expansion and high employment are not associated with the origins of the Depression; in fact, the decade preceding the stock market crash was marked by economic expansion followed by dramatic declines in employment.