Buying on Credit People could buy consumer goods by paying a weekly installment. Individual stores...
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Transcript of Buying on Credit People could buy consumer goods by paying a weekly installment. Individual stores...
![Page 1: Buying on Credit People could buy consumer goods by paying a weekly installment. Individual stores offered “credit” to customers. If used responsibly buying.](https://reader036.fdocuments.in/reader036/viewer/2022070414/5697c0261a28abf838cd5b31/html5/thumbnails/1.jpg)
Buying on Credit
• People could buy consumer goods by paying a weekly installment.
• Individual stores offered “credit” to customers.
• If used responsibly buying on credit is not a bad thing.
• Problems arose when people overextended their credit and did not plan for unexpected loss of income.
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Flat Income Growth
If income does not keep up with inflation workers can’t afford to by the goods they produce.
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Unequal Distribution of Income
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Overproduction
If producers can’t sell all of their products they must cut production; this means they need fewer workers.
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Unemployment
• Overproduction led to layoffs in factories.
• Workers without incomes could not pay rent, buy food, buy clothes, or pay for their consumer goods.
• There was no government assistance for unemployed Americans.
• Men especially were affected because they were seen as the breadwinners of the family.
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![Page 7: Buying on Credit People could buy consumer goods by paying a weekly installment. Individual stores offered “credit” to customers. If used responsibly buying.](https://reader036.fdocuments.in/reader036/viewer/2022070414/5697c0261a28abf838cd5b31/html5/thumbnails/7.jpg)
Overproduction on Farms
• Farmers had been able to sell all of their surplus crops during WWI.
• After WWI ended those surpluses caused prices to drop and incomes to plummet.
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![Page 9: Buying on Credit People could buy consumer goods by paying a weekly installment. Individual stores offered “credit” to customers. If used responsibly buying.](https://reader036.fdocuments.in/reader036/viewer/2022070414/5697c0261a28abf838cd5b31/html5/thumbnails/9.jpg)
The Dust Bowl
• Over use of farmlands in the WWI years combined with severe drought conditions to produce huge dust storms that buried much of America’s farmlands.
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![Page 11: Buying on Credit People could buy consumer goods by paying a weekly installment. Individual stores offered “credit” to customers. If used responsibly buying.](https://reader036.fdocuments.in/reader036/viewer/2022070414/5697c0261a28abf838cd5b31/html5/thumbnails/11.jpg)
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Bank Failures
• There were few regulations banks had to follow. They made very risky decisions.
• If a bank failed all deposits were lost and there was no getting the money back.
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Collapse in Construction
This had a ripple effect in the economy as demand for building materials, furniture, appliances and other home goods fell.
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Stock Market Crash
Banks and private investors lost millions of dollars when the market crashed. This event signals the historical beginning of the Great Depression.