The cause and effect of the great depression

Money supply decreased considerably between Black Tuesday and the Bank Holiday in March when there were massive bank runs across the United States. There are also various heterodox theories that downplay or reject the explanations of the Keynesians and monetarists. The consensus among demand-driven theories is that a large-scale loss of confidence led to a sudden reduction in consumption and investment spending.

The cause and effect of the great depression

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Yes Sorry, something has gone wrong. What caused the Great Depression, the worst economic depression in US history? It was not just one factor, but instead a combination of domestic and worldwide conditions that led to the Great Depression.

As such, there is no agreed upon list of all the causes of the Great Depression.

Causes and Effects of the Great Depression by India Robinson on Prezi

Here instead is a list of the top reasons that historians and economists have cited as causing the Great Depression. The effects of the Great Depression was huge across the world.

The cause and effect of the great depression

Not only did it lead to the New Deal in America but more significantly, it was a direct cause of the rise of extremism in Germany leading to World War II.

Stock Market Crash of Many believe erroneously that the stock market crash that occurred on Black Tuesday, October 29, is one and the same with the Great Depression.

In fact, it was one of the major causes that led to the Great Depression. Even though the stock market began to regain some of its losses, by the end ofit just was not enough and America truly entered what is called the Great Depression. Bank Failures Throughout the s over 9, banks failed.

Bank deposits were uninsured and thus as banks failed people simply lost their savings. Surviving banks, unsure of the economic situation and concerned for their own survival, stopped being as willing to create new loans.

This exacerbated the situation leading to less and less expenditures. Reduction in Purchasing Across the Board With the stock market crash and the fears of further economic woes, individuals from all classes stopped purchasing items.

This then led to a reduction in the number of items produced and thus a reduction in the workforce. As people lost their jobs, they were unable to keep up with paying for items they had bought through installment plans and their items were repossessed.

More and more inventory began to accumulate. American Economic Policy with Europe As businesses began failing, the government created the Smoot-Hawley Tariff in to help protect American companies. This charged a high tax for imports thereby leading to less trade between America and foreign countries along with some economic retaliation.

Drought Conditions While not a direct cause of the Great Depression, the drought that occurred in the Mississippi Valley in was of such proportions that many could not even pay their taxes or other debts and had to sell their farms for no profit to themselves.The effects of the great depression were also severe in other countries.

United Kingdom was still recovering from the effects of World War 1 which ended in when the great depression started in the United States of America and started spreading across borders to other countries.

The Great Depression

Great Depression - Top Five Causes of the Great Depression. These two broad interpretive frameworks, within which the Great Depression is understood, have stifled insight into the genuine causes of the depression as a whole as well as the reasons underpinning the severity of in particular.

May 08,  · Best Answer: cause - no money effect - less money because of loss of job What Caused the Great Depression? There are several explanations for what happened but the most obvious conclusion is that it was the confluence of several shortsighted and commiserating Resolved.

Interesting Facts About the Causes of the Great Depression. Economists still study (and argue) over exactly what caused the Great Depression. In the s, people began to buy goods using a type of credit called an "installment plan.".

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Causes and Effects of the Great Depression. The Great Depression was a dark period in the history of the United States, affecting all the socio-economic sectors of the Americans’ lifestyle. The Great Depression, one of the longest depressions in the history of North America, left Americans shaken.

Between the time of and an average of , people lost their jobs every week until some 13 million Americans were jobless.

The cause and effect of the great depression
Great Depression: Causes for Kids