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Main causes and effects of the great depression
Economic impact of the great depression
Main causes and effects of the great depression
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This being the cause of prices concerning stocks and shares to increase, to the point that it was nearly impossible to invest in the market. This being a factor in causing companies to terminate their employees swiftly, and if an individual remained employed, their wage decreased dramatically below the minimum wage. Many counterparts had invested in the stocks with loans or borrowed money, and when the market crashed, their share had been utterly wiped out, leaving them with absolutely no money. Individuals who had their money in banks, became skeptical of the banks and started to withdraw their money, to preserve their remaining savings. This, causing the banks to have to take out loans from bigger banks so that they could pay the individuals their money.
The great depression in the US, which began in 1929, and ended in 1938 was caused by many different things all happening at the same time in the economy. The wall street crash in October 1929 was one of the main causes, when the stock markets crashed. This was caused by many things, but the main reason for it was a deflation (which is an event where the general level of prices in an economy are reduced) On October 24th (black Thursday), share prices dropped by 14 billion dollars in a day, and more than 30 billion in a week. This forced many of the banks to close, due to them investing their client’s savings in the stock market.
Three of the main causes to The Great Depression involved the crash of the stock market, job loss and buying on credit. To begin with, the crash of the stock market was the starting factor that let to the downfall of many lives. The stock market was flourishing with investors but reduced economy by 60% over all (Document 1). Around 4 million Americans including many banks had invested large amounts of money in stocks hoping to earn gains (Document 3).
The Stock market Crash was one of the causes of the Great Depression. One cause of the Stock Market Crash was the stock exchange. This led thousands of Americans to invest in stocks and lose money. Many Americans borrowed money from the bank to buy stocks. Most of the time, people who lost money were unable to pay the banks back their debt; which caused banks to fail.
According to Document A, the farming industry in America was overproducing goods in an unprecedented amount, they were producing far more goods than they could sell which caused a decrease in demand and prices. The farming industry fell and was left with no money and goods they could not sell because of the overflow of production. As this was happening, The stock market had reached previously unheard-of heights and some investors were taking advantage of the historically low interest rates to purchase stocks, driving up prices even further. According to document B, The Boom in the Stock Market on Wall Street ended in a Crash. Thousands, if not millions of Americans lost all their life savings within days.
On October 29, 1929 the stock market crashed by 12 percent by the end of the day. Many people realized that Americans was starting to go into an economic depression from this crash.
As you may know, The Great Depression was one of the worst economic downturns in U.S. history. There are many debates on what caused The Great Depression some examples are, corporate leaders blame the depression on the result of a lack of business confidence in businessmen and how they were reluctant to invest because they feared the government regulations and high taxes. The Hoover administration blamed international economic forces therefore which should stabilize the currency and debt structure. New dealers argued that the depression was due to under consuming and that low wages and high prices had made it difficult to find a product of the international economy and that the lack of determination had led to economic collapse. But I also believe that the main factor of the Great Depression was the stock market crash of 1929.
The stock market crash of 1929 began a time period called The Great Depression. The Great Depression was an era of major unemployment and buisness faliure that lasted until 1939 with the help of President Franklin D. Roosevelt’s New Deal which implemented a framework that could protect American’s interests
The stock market crash of 1929 is often viewed as what started the Great Depression. However, the crash was not the cause of the depression but one of several factors that contributed to it. One possible cause of the Great Depression was the rapid expansion of credit in the 1920s, which led to a boom in consumer spending and stock market speculation. This created a false sense of prosperity, which eventually led to the crash. Another possible cause of the Great Depression was the unequal distribution of wealth in the United States.
What I now know after reading the primary sources is the Great Depression is how much the Stock Market Crash caused the stocks to completely go do down. Also the billions of dollars lost due to many stockholders pulling out their stocks which caused it to crumble since all the money that went in now was taken out but the companies that had the stocks now to have so they couldn’t afford to pay their holders the money. Also it states in the New York Times Stock Market Slump “ It was estimated that 880 issues, on the New York Stock Exchange, lost between $8,000,000,000 and $9,000,000,000” it also stated in The New York Times that “ Trading on the New York Stock Exchange aggregated 16,410,030 shares; on the Curb, 7,096,300 shares were dealt in.
The Great Depression was caused by speculation and installment buying, income maldistribution, and overproduction because each of these factors combined made the economy worse before and after the stock market crash, which led to The Great Depression. Speculation and installment buying helped caused The Great Depression because people were buying so much stuff on credit, when
Billions of dollars were lost, wiping out thousands of investors, and stock tickers ran hours behind because the machinery could not handle the tremendous volume of trading” ("Stock Market Crash of 1929”, History.com). Stock prices continued to decline and the Great Depression began in the United States. The crash of 1929 was not the only cause of the Depression; however it was a major factor and sped up the collapse of the economy worldwide. By 1933, 15 million people were out of a job and a majority of the United States’ banks had deteriorated ("Stock Market Crash of 1929”,
There began to be a gradual decline in prices and the stock market ruptured. On October 24, 1929, the infamous “Black Thursday” took place, where stock holders went on a panic selling spree. Things then went from bad to worse, stock prices went down 33 percent. People stopped purchasing goods and business investments decreased after the crash. In the fall of 1930, the first of four major waves
Bud ,Not Buddy Book Report The Great Depression, started in 1929, one of the most horrible times in human history. Factories closing down, businesses and banks gone, and people losing jobs left and right. It was a bad time in America where most people depended on charities just to survive each passing day. Many stories were made describing what was it like at that time.
One of the most influential and famous debates of economics is perhaps the need for government intervention. While Keynesian school of thought, which advocates government intervention in times of market failure, is the dominant ideology that gains great penetration in the U.S. academia, they face some strong opponents, which is Austrian school of economic thought. During the Great Depression in 1930, Keynesian economics is hugely appreciated in the U.S. as the U.S. government provided bailout for failed large corporations and stimulus programmes with deficit spending in order to boost consumption and investment. This essay hopes to explore the difference between Austrian School of economic thought and Keynesian school of thought on the issue
