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Great Depression Essay

595 Words3 Pages

Jay Weber

Mrs. Unger

English

24 April 2023

Main Causes of the Great Depression

The Great Depression was a big worldwide problem that did not just happen in America and there were many causes for it. By looking at the causes of the Great depression, people could learn more about it and try not to repeat history. What is believed to be some of the most likely causes of the Great Depression are how World War I left America, the Wall Street crash, and the banking panics and failures.

World War I was one big factor for the cause of the Great Depression. America was in World War I for only 19 months. Despite that they spent “$32 billion, or 52% of national product at that time” (“The Economics of World War I”). America needed money for the war, so they made what was called the “Liberty Loan.” This loan asked American citizens for some money. This loan raised $17 billion dollars and $8.8 billion from citizen’s taxes. The inflation after World War I was also bad. In the period of 1914-1920 inflation in …show more content…

The Wall Street Crash happened in 1929 and was one of the biggest crashes in history. The reason why the stock market crashed was because “millions of people invested their savings or borrowed money to buy stocks, pushing prices to unsustainable levels” (“Stock Market Crash of 1929”). This event kind of made a chain reaction that made things worse. The people who invested money into the stocks in the Wall Street crash lost much of their savings (“Unemployment during the great depression”). This caused them to spend less, which created lower demand for goods and services, and when the business saw the fall in spending, they cut back on output and hired less people for jobs (“Unemployment during the great depression”). The stock market crash was the beginning of the Great Depression and led to the depression getting worse in other financial areas such as

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