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What Caused The Great Depression Dbq Research Paper

556 Words3 Pages

The crash of the stock market on October 29 1929 was one of the main causes of the Great Depression. Black Tuesday brought to an end the roaring twenties and its wealthy people with their successful plans to become millionaires. The Great Depression was one of the deepest long-lasting economic downturn in the western history. Economists have the theory that the Great Depression was caused because of the Law of supply and Demand miscalculation, Say’s Law misinterpretation and the business cycle not being a cycle but more like a roller coaster. Therefore the Great Depression was caused by people not being able to interpret how economics work. The Law of Supply and Demand was miscalculate when industries started to overproduce products and let people buy them in installments. They were buying too many products on installments without knowing that their incomes were not expanding as fast as their debts. It was inevitable when they had to reduce their purchases to be able to survive the stock market crash. However, the cutback had a negative impact on the economy because many investors put too much money on the stock market, causing the security price to increase by the “competitive bidding rather than by any fundamental improvement in American business” (Document 5). Since, people have not had the opportunity to pay back their …show more content…

However, the overproduction was massive and when people were not able to afford to buy more products. As a consequence the production slackened increasing the rate of U.S. unemployment. For this reason, people were not able to afford to pay their bills and debts. The economy was not advancing because people did not have the money to end the surplus and even though the price were dropping really fast and low, people could not manage to pay their debts and buy more products at the same

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