What caused unemployment in the 1920s?

Answer 1

People were unemployed because of the depression, which was a result of the collapse of the US economy and the severe drought in the midwest which had created the dustbowl.

Throughout the 1920s, it became commonplace for Americans to purchase stock in the stock marketfor a down payment of pennies on the dollar. The result of this practice led to people buying blocks of stock that they did not have the money to pay for. Not unlike the real estate sold to those who could not actually afford it leading to mass mortgage defaults and the collapse of the real estate market 2005-2008. Companies could not operate without the capital generated by the sale of stocks and hundreds of companies shut down putting those employees out of work as well as those in businesses that supported those companies.

At the same time in the midwest, a severe drought coupled with poor farming practices caused the soil to dry out completely so that it could not support crops. Without crops holding the soil in place, huge dust storms were created. Farmers could not earn an income and most defaulted on their mortgages and loans. Since the majority of the midwest population was supported by farming, great armies of people were without homes or jobs.

This period was known as The Great Depression.

Answer 2

There was arecession during that period, like there is today. Economic activity just slowed down.

Answer 3

Wall street crash

Answer 4

because there were no houses built