Which of the Following Was NOT a Cause of the Depression

question 2

Multiple Choice

Which of the following was NOT a cause of the Depression?

• A) The gold standard caused a tightening of currency supplies worldwide.
• B) Corporate structures had been bloated by the success of the 1920s but were unprepared for the tightening of the economy.
• C) Mellon's business-friendly tax policies enticed the rich into more frenzied stock market speculation.
• D) Much of the profits that had been taken during the 1920s had been put back into companies rather than saved or invested in other ways.
• E) As consumer spending declined, the rate of investment in new factories and businesses also plummeted.

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Definitions:

Liabilities

Financial obligations or debts of a business that are due to be paid to creditors in the future.

Accounting Equation

The foundational principle in accounting that states assets equal liabilities plus shareholders' equity.

Profitable

Refers to a financial state where income exceeds expenses, resulting in a positive gain.

Accounting Equation

The foundation of double-entry bookkeeping, which asserts that assets equal the sum of liabilities and shareholders' equity.