Main Causes Of The Great Depression

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What were the main causes of the Great Depression?

The Great Depression, which began in 1929, was a financial crisis that had a seriously negative impact on the whole of the western world. Although it is agreed by most historians that the crisis began in 1929 with the Wall Street Crash, it was not until the 1930s that the crisis took its toll on the majority of the countries involved. This period would last until 1941, when the United States began preparations to enter the Second World War. Many people believe that the main cause of the Depression was the Wall Street Crash however this is far from the truth. The Great Depression occurred shortly after the Wall Street Crash however there were numerous causes that I will briefly introduce
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This was a concern in both the industrial industry as well as in the agricultural industry. Farmers had been producing more food than the public was consuming since the First World War resulting in the farmers becoming debt-ridden by the mid-1920s. Land prices for farmers plummeted by 40% which led to high levels of unemployment across America by 1929. However, despite the fact that agriculture was struggling in America, industry was soaring in the years leading up to the Great Depression. In the so-called ‘boom’ period before the bust many people bought luxury products, such as cars, on credit. However, the demand for these goods and services soon stopped as people didn’t see the need to constantly update by buying the newest product meaning the factory workers couldn’t afford their own products. The following economic crisis would prevent trading of products with the European countries on the other side of the Atlantic leading to unsustainable…show more content…
This is a system of currency in which money is fixed against an actual amount of gold. This meant that countries, in order to make it work, had to adapt by maintaining high interest rates so that they would be able to attract international investors who bought these foreign products with gold. However, when this stopped in the 1930s the government had to scrap this system in order to prevent the situation from worsening. It was essential for all countries to make this decision however America’s failure to do this meaning that this delay heightened the severity of the crisis and increased the size and increased its threat in terms of size and
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