Essay on The Rise Of The American Economy

1279 Words 6 Pages
1.. Most Americans believed the economy was strong in the 1920s, and did not realize that it was not as great as it seemed. This was mainly due to the overall lack of knowledge of the economy. People were buying and buying more than ever before, taking out loans without the complete ability to pay them back, and that was because that’s what the government was telling them to do and what was being advertised in society. Many things in the United States seemed great, but were really leading to a major economic downfall, such as the unequal distribution of income, poor corporate/banking structures, and the over-speculation of the stock market.
People failed to realize that the economy was not as strong as it seemed. Not only average citizens, but banks and businesses also over-estimated and had too much confidence in the stock market. They were taking out loans and spending more than they physically had. They were under the impression that the money they had invested was theirs and they could safely access it at any time- but that wasn’t true. When the stock market crashed, that money was gone. This led to the closing of banks, which also led to people having no way to access the money they legitimately had saved safely. No one really realized the poor state of the economy because they were so focused on the prosperity of the 1920s and how great everything was.
2. After October 24th, which was the first day that stock prices began to drop, there was a five day period where the…

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