Impact Of The Great Depression On The Economy Essay
The impact the Great Depression had on the economy was brutal. As unemployment reached all time highs. Which meant less money flowing through the economy. As America was the leading economy in the work, when it faltered, it also caused other nations economies to collapse as well.
Some economists point a finger at protectionist trade policies and the collapse of international trade. The Smoot-Hawley tariff of 1930 dramatically increased the cost of imported goods and led to retaliatory actions by the United States’ major trading partners. This meant when something was imported it costed a little bit more money for that corporation or business to import it to America. A man 's suit cost about $10, a shirt less than 50 cents, and a pair of shoes about $4. Milk was 10 cents a quart, a pound of steak only 29 cents, and a loaf of bread a nickel. As you can image back then this was a lot of people to working class citizens who valued every penny that they made. Banking directly impacted the economy in a way that anything else could. Banking relied on firm and confident depositors. If someone who has a deposit with a bank feels that their money is at risk they will simply pull their money leaving the bank with no business. The government began to increase interest rates, in 1929, from 3.5% to 5%. Many seem to believe that this was the root cause of the start of the recession to come during the late 1920’s. The United States Government made a grave…