The Great Depression was caused by a combination of factors, including the stock market crash of 1929, overproduction, unequal distribution of wealth, high tariffs and war debts, and a banking crisis.
The stock market crash of 1929, also known as Black Tuesday, was a major trigger for the Great Depression. Stock prices plummeted, causing panic and leading to many investors losing large sums of money.
Overproduction also played a significant role in the Great Depression. Industries were producing more goods than consumers could afford to buy, leading to a surplus of products and a drop in prices. This eventually led to layoffs and reduced production, further exacerbating the economic downturn.
The unequal distribution of wealth in the 1920s meant that much of the country's wealth was concentrated in the hands of a few wealthy individuals, while many Americans struggled to make ends meet. This lack of purchasing power from the majority of the population contributed to the economic problems of the time.
High tariffs on imported goods, meant to protect American industries, led to retaliation from other countries and a decrease in international trade. This further hurt the economy and contributed to the downward spiral of the Great Depression.
Finally, a banking crisis in the early 1930s led to many bank failures and a loss of confidence in the banking system. Many people rushed to withdraw their savings, causing further economic turmoil.
Overall, the combination of these factors contributed to the severity and length of the Great Depression, which lasted until the start of World War II.
Explain and describe the causes of the Great Depression.
All answers MUST be in complete sentences.
1 answer
1 answer