Review: Great Depression
Cause #3: Overproduction of Goods Part 2
and #4: Income Inequality
1920s Economy:
Overproduction of Goods Part 2
Multiplier Effect Activity
(Occurs during any business cycle)
• Relationship between
consumer spending and
unemployment
• Multiplier Effect: one
person’s spending becomes
income to another person,
who in turn can spend more
and add to the income of
others.
Loss of Consumer Wealth & Confidence
(People stop saving and spending!)
Income Inequality
What is it?
Why is it an issue?
How does it affect us today?