Task 4 by April Maddox.docx Great Depression-Factors A: There were many factors that led

Task 4 by April Maddox.docx   Great Depression-Factors A: There were many factors that led to the Great Depression. One such factor was underconsumption. Housing demand slowed as did demand for cars and appliances. Inventories were building up for retailers, so they too started ordering fewer supplies. Due to all of this decrease in spending, workers wages were being cut and many jobs were eliminated. This created a vicious circle of families spending less, so employers kept cutting wages and jobs. Businesses also began taking out loans that they couldn ™t repay, which caused the collapse of the banking industry. (Norton, 2015).  Another factor leading to the Great Depression was American lending to European countries. America was lending huge sums of money to finance World War I, but American investors started investing in stocks instead of lending. This caused the European countries to stop spending money in the U