An economic slump or downturn can affect any country’s economy. From time to time, there has been a period when a country or the world’s economy has been performing badly. One of such incidents in history is the Great Depression. In the history of the United States, the Great Depression marked some of the darkest days in the country’s economic performance. The economic slump was one of the deepest and longest lasting in the history of the American industrialized world and Europe. The great depression was experienced between the years 1929 and 1932.
The Great Depression had its beginning marked by the crashing of the Wall Street in the year 1929 and started rapidly spreading into other parts of the industrialized countries. The Great Depression caused different economic demerits such as unemployment increase, deflation, reduced profit, and loss of economic growth opportunities; the impact of the incident hit the American and the other nations harder than it was anticipated. Despite the tremendous negative impact of the economic incident, it was believed that, different causing factors were behind the economic downturn.
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On the other hand, there was a massive drop in the prices of agricultural products meaning there was fall in profit for the farmers. Another factor is the instability status of the stock market, as investors overwhelmingly bought the stocks anticipating for future returns. Instead, this contributed to the collapsing of the stock market. The banking sector suffered massive downturn due to unpaid loans. The great depression incident reached its bottom in the year1932, with the then president laying down recovery plan. President Roosevelt led to the formation of the FDIC, which offered a hedge against the massive bank losses