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Depressed

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33 views1 page

Depressed

great dep

Uploaded by

tesicojayson13
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Name: Jayson T.

Donasales Course & Year: BSA-2

GREAT DEPRESSION (1929)


The Great Depression was a worldwide economic crisis that began in 1929 and lasted until the 1939. It is
considered one of the worst financial downturns in history. It started in the United States, but its effects spread
to other countries. The beginning of the Great Depression is often linked to the stock market crash of October
1929, when the value of stocks in the U.S. dropped sharply, causing panic among investors. This led to a decline
in consumer confidence, and people started spending less, which hurt businesses. As businesses made less
money, they cut jobs, and unemployment started to rise. Banks also began to fail as people rushed to withdraw
their money, leading to a loss of trust in the financial system. One of the key problems during this time was that
many countries, including the U.S., were still using the gold standard. This system tied the value of money to a
fixed amount of gold. To keep the value of their currency stable, countries had to raise interest rates, which
made borrowing money more expensive. This discouraged people and businesses from spending or investing,
making the economic situation even worse.

Another factor that worsened the crisis was the Smoot-Hawley Tariff Act passed by the U.S. in 1930. This law
imposed high taxes on imported goods to protect American businesses, but it backfired. Other countries
retaliated by imposing tariffs on U.S. goods, which led to a sharp drop in international trade. With less trade,
economies around the world suffered, and the Depression spread globally. During the Great Depression, many
people lost their jobs and homes. Businesses failed, banks collapsed, and farmers were especially hard-hit due
to falling crop prices. Recovery began slowly in the early 1930s, with the most significant improvement in the
U.S. coming after 1933 when President Franklin D. Roosevelt introduced the New Deal. The New Deal was a
series of programs aimed at helping the economy recover, providing jobs, and regulating the financial system to
prevent future crises. Public works projects, like building roads and schools, employed many people and helped
rebuild the economy. In the mid to late 1930s, many countries started to abandon the gold standard, which made
it easier for them to print more money and encourage spending. However, the Depression did not fully end until
the late 1930s or early 1940s. For many countries, the increased government spending on military preparations
for World War II was a key factor in finally overcoming the economic crisis.

In summary, the Great Depression began with the stock market crash of 1929 and was worsened by bank
failures, international trade restrictions, and policies tied to the gold standard. It caused widespread
unemployment, poverty, and suffering around the world. Recovery was gradual, with significant improvement
in the U.S. coming through the New Deal, and the eventual end of the crisis was helped by global events
leading to World War II.
References:
Romer, C. D., & Pells, R. H. (2024, August 25). Great Depression | Definition, history, dates,
causes, effects, & facts. Encyclopedia Britannica. https://www.britannica.com/event/Great-
Depression

Chakra, H. (2023, August 6). The Great Depression 1929 - about history. About History. https://about-
history.com/the-great-depression-1929/
The Editors of Encyclopaedia Britannica. (2024, September 11). Stock market crash of 1929 | Summary,
Causes, & Facts. Encyclopedia Britannica. https://www.britannica.com/event/stock-market-crash-of-1929

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