The Great Depression
1929 is a year that most of our grandparents or great-grandparents remember, as it was a year when one of the most significant events occurred in the history of the United States and affected other nations globally. It was the year the Great Depression began. Preceding this great event in our history was a time where businesses were laissez - faire, markets were independent of government interference, monopolies were free and taxes were severed. Inequality of income and wealth increased, government tariffs and regulations pierced through America's foreign market and hardly any modification by the Federal Reserve was made toward the money supply. Inevitably, these measures would lead the causes of the Great Depression. Although the causes are greatly debated, certain causes are most notable. Causes such as false prosperity, the stock market crash, the banking crisis, unemployment and trade collapse are significant in understanding such a historical event. FALSE PROSPERITY. False Prosperity prior to the Great Depression referred to a false sense of the economy thriving. Many individuals borrowed money strictly to get a piece of the stock market action. In the middle of the year 1928,
Friday was fairly calm in relative to the previous day. Industrialized nations and those supplying primary products were all affected in one-way or another. Nevertheless, what caused the market to crash? There are many individual theories as to why the market crashed, but, in actuality, there was a combination of events that ultimately led to the crash. At the close of the decade, the "Roaring 20's" screeched to a halt. The economy at this time was very unstable due to the unequal distribution of wealth. The businessmen thought that this would mean increase in capital savings. This presumption held true for several years. Under the Gold Standard, which linked currencies to the value of gold, governments were committed to maintaining fixed exchange rates. Unemployment affected the GDP causing a decline instead of growth. However, unemployment caused an impact on the economy as a result.
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