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What Caused The Great Depression

158 Words1 Pages
In response to question 1, the major cause that started the Great Depression was foreign policy toward trade. High tariffs were place on foreign imports which in turn caused other countries to do the same for American imports. This in turn reduced the demand for American goods, resulting in over production, dropping prices, and the inability to pay off dept for the equipment needed for the previous high demand of goods. The downward spiral of cause and effect led to workers being laid off to cut cost for lower demand products, farmers foreclosing due to low demand for crops, banks closing due to unemployed customers trying to withdraw savings, inflated and fraudulent stock market practices, and decreasing confidence in the capitalist system.
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