How Did The Great Depression Affect The Economy

The Great Depression was the period of economic failure in US. It led to unemployment, poverty and failure of investment. The Great Depression affected everyone from the highest bosses to the lowest factory workers. It also affected trade thus it affected the Global Economy. The period began after the stock market crash of 1929; this destroyed millions of investors. Consumer spending went down thus industrial output went down as well. Industries failure meant that people were laid off and unemployment elevated to twenty five percent. Franklin D. Roosevelt’s policies decreased the effects of Great Depression and WWII ended the great depression.
First, it was the recession which eventually turned into the Great Depression. People in 1920 had firm belief that the stock market will continue to go up. The problem was that the stock market price continued to go up while consumer spending was low, production was low. How do we afford the stocks? The stock market crash of 1929 was the result of millions of investors started trading their shares. Millions of shares were basically worthless …show more content…
Banks were the main cause of Great Depression. The crash destroyed the bank for the banks used depositor funds to bet that share price would go up. The stock market crashed and the banks lost the money. The people heard about the bank conditions and they wanted their money. The failure of the banks to deposit money was the cause of depression. Everybody wanted their money at the same time which was the problem. This destroyed many banks and people were led to poverty and the misery lasted for a long time. Poor innocent people who were not even investors; they saved for their entire life had no money left. Since people had no money thus they could not spend any money. The decrease in consumer spending led to lower production which led to unemployment. The drought also worsen the problem of unemployment and fed the Great