Please enable JavaScript.
Coggle requires JavaScript to display documents.
Financial Collapse - Coggle Diagram
Financial Collapse
A Flawed U.S. Economy
Despite prosperity, several weaknesses in the U.S. economy caused serious problems. This included uneven distribution of wealth, overproduction by business and agriculture, and the fact that many Americans were buying less
American factories were turning out nearly half of the world's industrial goods. The rising productivity led to enormous profits, however the wealth was not evenly distributed
The richest 5% received 33% of all personal income, yet 60% earned less than $2,000 per year. Most families were too poor to buy the goods being produced.
Unable to sell all their goods, store owners eventually cut back their orders from factories. Factories in turn reduced production and laid off workers. As workers lost their jobs, families bought even fewer goods. Factories made further cuts in production and laid off even more workers
Overproduction affected American farmers. Scientific farming methods and new farm machinery had dramatically increased crop yields
Competition from farmers in Australia, Latin America, and Europe resulted in a worldwide surplus of agricultural products drive prices and profits down
Unable to sell their crops, many farmers could not pay off the bank loans that kept them in business. Banks were forced to close
-
-
-