Question

During the worldwide economic depression of the 1930s, industrial output, farm production, and employment fell dramatically due to which of the following?

Answer 1

The cause of this fall is that the people had less money to spend and less money spent the lower the paychecks 

Answer 2

We can point out as the major creator of the great depression the imperfections of government policies during the 20s. A high level of intervention on high tariffs, a weak implementation of anti-trust laws, which is not difficult to understand why it was so underused during this period. The stock market crash also contributed decisively to show the inconsistencies of economic confidence. Too many businesses had maintained high retail prices and taken large profits while holding down wage increases. As consumer spending declined because wage increases were not keeping up with price increases, the rate of investment in new factories and businesses also plunged.