Answer:
(i) Agricultural
overproduction: Agricultural overproduction led to the falling agricultural
prices. As prices fell, agricultural income declined, farmers tried to expand
their production and sell more in the market to earn. This worsened the
situation as prices further fell, leading to farm produce rotting in the market
with lack of buyers.
(ii) Withdrawl of US loans: Many countries financed
their investments through loans from US but US overseas lenders panicked at the
first sign of trouble. US overseas loans had gone upto $ 1 billion but it
reduced to one quarter of that amount and countries depending on US loans now faced
an acute crisis.
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