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How Did The Great Depression Affect The Economy

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The Great Depression America’s economy experienced a number of changes during the Depression. During this time, many of the country’s banks failed. These in turn caused business failures, causing unemployment to rise above twenty percent. The national GDP fell by about twenty percent as a result of business failures as well. The wholesale price index also fell, decreasing by thirty three percent. This sudden drop in prices is referred to as deflation.
A few other negative effects include the development of a highly protective tariff. Although it was supposed to help the economy, it actually worsened it, because it caused a decline in trade between America and other countries. Worst of all, people began to question the effectiveness of capitalism. …show more content…

Capitalism in America began to break down. At the same time, totalitarianism began to rise. Also, the Great Depression drove America closer to war.
However, the Depression had some positive impacts as well. After Franklin Roosevelt was elected, he began trying to find ways to help the economy recover and keep the American spirit alive. His encouragement for America to stay strong and the actions he took to support the economy, such as the establishment of the New Deal, caused Americans to change their views of the Democratic Party in a more positive way. As another positive effect, the severity of the failing economy and the varied effects it had on different communities drove politics to become more personally involved in the recovery of the nation.
The Depression left some of its biggest impacts on American society. When the economy collapsed, and unemployment rose, many people were unable to pay their bills, taxes, or other payments, so they were unable to keep their houses, causing the standards of living to drop. The inability to find an available job allowed many teenagers to become drifters. Also, children often had to take on adult responsibilities, sometimes even having to comfort their parents, who suffered great losses. In the Plains states, many people were driven from their homes due to the Dust Bowl. When the economy was stuck in a continuous decline, many people began to lose faith in it, and the sudden collapse even caused national

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