Texas A&M University (TAMU) HIST106 History of the United States Practice Exam 2

The economic issue characterized by falling farm prices and rising unemployment is indicative of warning signs of depression. During an economic downturn, agricultural sectors often experience declining prices due to overproduction, decreased demand, or issues such as drought or pests affecting crop yields. The agricultural sector's struggles can lead to broader economic issues, including increased unemployment as farmers and those tied to agriculture, such as suppliers and laborers, face job losses.

In times of economic distress, such as a depression, these factors combine to create a challenging environment where economic activity slows, and consumer confidence deteriorates. This situation amplifies the potential for widespread economic issues, setting off a cycle of reduced spending, further drops in farm prices due to lower demand, and an increase in unemployment rates.

In contrast, economic growth suggests an improving economy with rising prices and employment, economic stability refers to a balanced economy with minimal fluctuations, and market recovery implies a rebound from a previous downturn. Hence, only the notion of warning signs of depression accurately captures the essence of falling farm prices and rising unemployment.