What were the 4 main causes of the Great Depression?

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1 answer

1. Stock Market Crash of 1929: The most well-known trigger of the Great Depression was the stock market crash of October 1929. This event led to a massive loss of wealth for investors and a sharp decline in consumer spending.

2. Banking Failures: In the wake of the stock market crash, many banks failed as panicked depositors withdrew their savings. The failure of banks led to a severe contraction in the money supply, making it difficult for businesses and individuals to access credit.

3. Reduction in International Trade: The Great Depression was a global economic crisis, fueled in part by a significant reduction in international trade. Protectionist policies, such as tariffs and trade barriers, exacerbated the economic downturn by limiting the flow of goods between countries.

4. Drought and Agricultural Decline: During the 1930s, the Great Plains region of the United States experienced severe drought and dust storms, leading to the devastation of farmland and agricultural production. The agricultural sector, which was already struggling due to overproduction and falling prices, was further weakened by the environmental disasters of the Dust Bowl.