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With low prices for food the surplus which was created was immediatly washed awa

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As a result of the people believing the economy would just continue to grow the artificially risen prices on wall street began to dip. People who now saw a dip in the stock market panicked and began to sell their stocks at a massive rate making stocks worthless. People had lost all their lifes saving in stocks and now with barely too no money at all the economy crashed. This could have been avoided if people had some common sense and saw that the massive growth of the economy would be unsustainable and could not be counted on to keep growing.

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Banks in the 1920s were loaning money away believing that people would pay them back. People's money in banks was loaned away at alarming rates leaving people to only hope that the economy would continue to grow to pay off their debts. This could have been avoided by banks making sure that those who asked for a loan could actually pay off their debt later instead of an I.O.U

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Overproduction can be a good thing since it brings about a surplus of goods but in the 1920s it was the opposite. Farmers who had taken loans to expand their farms were now overproducing crops in hopes that it would pay off their debt. But the price of agriculture had dropped significantly due to other farmers overproducing and creating a surplus. The surplus of goods doomed farmers since they had relied on their crops selling at high prices to pay off their loans. This could not have been avoided since the trend was that the economy would never stop growing and anyone back then would have now way of knowing that it would collapse very soon.

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 Cause, Too many loans and more spending.

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 Cause, Too many loans and more spending.

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One of the main causes of the great depression is the overall unnecessary spending on expensive goods and taking out loans which would not get paid off. People in the 1920s had an optimistic hope that the economy would just keep getting better and better without any recessions. This false hope encouraged people to take out many loans using the money to buy cars, new electronics and use their money to invest in stocks. People invested the money in stocks so that in the hope the economy would grow that they could pay back their loans. People even took out loans to pay off other loans racking up debt in the process.