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economy unstable. For an economy to function properly, total demand must equal total supply. In an economy with such different
distribution of income, it is not assured that demand will equal supply. Essentially, what happened in the 1920's was that there was an oversupply of goods. It was not that the surplus products of industrialized society were not wanted, but rather that those whose
needs were not satisfied could not afford more, whereas the wealthy were contented by spending only a small portion of their income...
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It was not that the surplus products of industrialized society were not wanted, but rather that those whose
needs were not satisfied could not afford more, whereas the wealthy were contented by spending only a small portion of their income. Three quarters of the U.S. population would spend essentially all of their yearly incomes to purchase consumer goods such as food, clothes, radios, and cars...
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