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How Did The Great Depression Affect The Economy

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Title Exploring the Impact of Historical Economic Events on AS/AD Dynamics, Growth, and Stability. The Great Depression (1930s) was an iconic example, causing simultaneous demand and supply shocks that led to soaring unemployment and an extensive economic downturn, prompting policymakers to intervene with fiscal and monetary measures to restore stability. The Great Depression affected more than just the United States. It affected all countries throughout the world in different ways and some were affected simultaneously, others were affected later. The United States and Germany seem to have been affected by about the same percentage. The ultimate cause of the “Great Depression” was the less spending. According to C. Romer et al., 2024. This …show more content…

The highest year during that time period was 25.2% in 1933. Inflation during the Great Depression decreased about 24%. However, it didn’t stay that way for very long for the United States. It increased back by 1933 and remained in inflation. How would we analyze and believe the businesses responded to the Great Depression, did they change the production processes, change their pricing strategies, or diversify their offerings? Analyzing everything that happened during the Great Depression, businesses slowed down, some had to close, production was slow, and unable to be sold caused businesses to sell for less, wages and jobs were lost, people lost their homes banks were struggling, people lost a lot of money, and people were losing their homes. For the United States, it took about 14 years to recover from this. Conclusion: What can modern business learn from the Great Depression? I think modern business should always have a reserve, one that will not only cover expenses during a time of need, know that they can save jobs by cutting unnecessary costs so that families do not lose their homes, people may still be able to feed their families, and perhaps become companies that want to help their

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Throughout the many years of the Great Depression, the American economy plummeted greatly because of ongoing issues throughout the United States. The American market, and essentially continuously buying, are what keeps an economy in any country moving. The points at issue which allowed the economy to go down consist of three major factors. All three of these aspects took a great amount of citizens down along with all of their profits. Families, businesses, and employees struggled to stay standing during this time period.

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Firstly, the Great Depression harmed the American people by having them change their lifestyle. Since so many people lost their jobs, money was terribly scarce.

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"Great depression?" they gasped. Consumer confidence plummeted, as did consumer spending (which accounts for a stunning 2/3 of US GDP). Corporations, in a mass panic, swiftly switched into a mode of panicked layoffs and cost cutting. The banks, already spooked, continued to tighten their lending not just to consumers but to corporations and other banks as well. And ditto for the rest of the world.

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In 1929, the U.S. was hit with the worst economic crisis in the history of the country, the Great Depression. The Great Depression left millions of people unemployed and cost millions their life's savings. The Depression lasted for ten long years for the American people. Since the Great Depression ended, people have studied it, trying to figure out what happened that started it all. The problem was, in fact, the poor economic habits of the people at the time, such as speculation, income maldistribution, and overproduction.

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