3
QuizMultiple Choice

The Interwar Years — Test

Question 3 • US History

In the 1920s, what did businesses and industries do that caused the economy to slow down?

Answer
A
They overproduced goods.
B
They stopped buying stocks.
C
They bought stocks on margin.
D
They hired more workers.

Explanation

Businesses and industries made more goods than consumers could buy. This overproduction led to unsold products, reduced production, and eventually layoffs, which slowed the economy. Buying stocks on margin contributed to financial risk, but it was not the main business practice described here.

AI-written and checked against the verified answer.

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