Reactions To The Great Depression

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The Great Depression, starting in 1929, was the greatest catastrophe in the history market systems that left a magnitude of people in poverty, while also lowering global GDP and creating an overall economic downfall. It all began with the great crash, occurring on October 29th, 1929, as the stock market disintegrated into fragments resulting in millions discovering that their paper gains had become nothing. There were many reactions and towards the looming event as economists attempted to find a resolution in order to soothe the dilemma. The various reactions and outcomes of the Great Depression helped to shape economic theory, social life, and people’s views of a market economy in general. In order to determine the extent of these various cases, one must assess the various economic, social, and political adherence towards the market economy throughout history. Thus, the Great Depression was a substantial and consequential event that led to thought-provoking fallout. Throughout the Depression era, Keynesian economists reflected across the …show more content…
Undoubtedly, as government spending increases, in terms of infrastructure, the demand for businesses and employment drastically increases. This is done as the government performs expansionary fiscal policy by spending more, taxing less, or both, which helps restore the balance caused by a deficit. Likewise, this approach remarkably helps the economy during the Great Depression as the financial deficit becomes balanced through a surplus counterweight, returning the economy to a stable standing point. Furthermore, if the government exceeds in its expected revenue, then they can borrow from capital markets and issue government bonds to finance the difference. Thus, the increase of infrastructural government spending promotes involvement in businesses and employment while balancing the total level of spending within the

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