Maldistribution's Economic Impact

Superior Essays
The Great Depression, it was a time in our history spanning through the 1930’s that saw an extremely dramatic economic downturn, well known as the worst in our history. It’s affect was felt by people all over the world. This dramatic economic condition is now referenced as the the worst that the economy could ever get. It’s affect ran over, so to speak, so many people from every economic class. It not only affected companies but it affected just about everyone across the board, no discrimination. Everyone was in it for the long haul. People’s income began to marginally decrease to the point the profit people and companies made kept decreasing, the governments tax revenue plummeted , the price of things dropped because the value and worth of …show more content…
This was really a way to only make the rich, richer and the poor, well destitute. The nations overall income rose dramatically and the distribution of money was poorly mishandled. The upper class people’s income in the economy was higher than the combined income of the middle and lower class people. One example maldistribution is Henry Ford. Mr. Ford was making an enormous amount of money from his new automobile invention, the Model T. Ford was bringing home almost 14 million dollars per year in a time a loaf of bread was 5 cents. The average income back then was just 750 dollars per year! If you compare that to today’s average income, which is about 24,500, then Mr. Ford would be making nearly 395 million dollars per …show more content…
Some banks were even forced to close their doors without warning.This meant nobody had access to their money. They essentially lost all of their savings. The major loss was trust, They all became hesitant in putting their money in banks which lead to the failure of further banks. People began to become extremely frugal and hesitant to spend any money on anything. Once people stopped buying products and stopped spending, leading to the closing of companies and loss of jobs for the factory workers of those companies. This started a cycle where less spending meant less company profit, which meant loss of jobs, leading to unemployment at high rates so once again spending was affected because people had dropped incomes preventing them from buying.

The effects of the Great Depression were ongoing for many years. There were also many countries were affected besides the United States. It affected countries such as Australia, Canada, East Asia, France, Germany, Latin America, Netherlands, Soviet Union, and many others that were less affected. Australia, Canada, the Netherlands, Germany, and Latin America were affected majorly. These countries were mostly affected by their exporting goods since trade was shut down because of the depression and unemployment rates dropped dramatically as

Related Documents

  • Superior Essays

    Due to the collapse, companies went into bankruptcy and due to the economy 's state, they were forced to fire and stop hiring employees. This led to vast unemployment all across Canada. All provinces experienced a very rapid decline in work output and a significant increase in unemployment. Although unemployment was mostly affecting the working class it touched all of the people living in Canada in one way or another (Dictionary of American History, 2016). Since all businesses were in a decline, work was very scarce.…

    • 1188 Words
    • 5 Pages
    Superior Essays
  • Improved Essays

    The Great Depression was an extreme time of struggle for not only the economy of America, but also the American people of every race. The Great Depression took place from 1929- 1939. One of the main reasons of what led to the Great Depression was the crash of the stock market. The crash itself propelled and drove Wall Street workers straight into a major fear and nightmare that was thought and imagined to never come. Throughout the years that came “Consumer spending and investment dropped, causing steep declines in industrial output and rising levels of unemployment as failing companies laid off workers”.…

    • 1074 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    Stock Market Causes

    • 1142 Words
    • 5 Pages

    Many individuals were unable to pay off their things because most of them had lost their job. Because of the job reduction, the unemployment rate rose to twenty-five percent, which did not help the economy. The fourth factor of the Great Depression is the American economic policy with Europe. The government established the Smoot-Hawley tariff, which imposed a high tax on foreign products. Unfortunately, due to the tariff, foreign countries began trading less and less with the United States.…

    • 1142 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    The lack of employees has produced an initial increase in monetary savings but the prolonged effects of not having adequate employees will yield a large decrease in the revenues over an extended period Fd gqert q4tq gqert notice a lack of employees manning the store. If you have a question about a product good luck trying to hunt someone down to assist you with your inqucdtrt;qwerkqwe’r233343240234l’iry. Often times you will feel as if you are the only one in the store. This is due to the fact that TheStore has trimmed the company employees down below an acceptable level for conducting normal business operations. The lack of employees has produced an initial increase in monetary savings but the prolonged effects of not having adequate employees will yield a large decrease in the revenues over an extended period Fd gqert q4tq gqert notice a lack of employees manning the store.…

    • 52230 Words
    • 209 Pages
    Improved Essays
  • Improved Essays

    According to the article “The Great Depression Brings Economic Crisis” from the book Great Events, The Stock Market Crash of 1929 caused one of the largest economic depressions in the history of the United States causing many American families to lose nearly all of their money. When this occurred, the United States government did very little to help the citizens of the United States leaving families and the working class to fight for their survival. The Stock Market Crash of 1929 changed the lives of the United States working class as the crash caused money loss, job loss, poor living conditions, lower wages, and struggles for food across America for the working class during the 1930s. The Stock Market Crash of 1929 caused several losses for…

    • 1472 Words
    • 6 Pages
    Improved Essays
  • Great Essays

    Credit unions had no money to loan or invest and were forced to declare bankruptcy. The Federal Reserve Board played a big role in bank failures, because they cut interest rates to stimulate economic growth. Many people feared that their money was being misused (it was) so they went and withdrew all their money. The banking system was not ready for such heavy losses, had no insurance and had to close their doors to the public. By 1933, nearly half of the country 's banks had…

    • 1174 Words
    • 5 Pages
    Great Essays
  • Improved Essays

    As a result of the decline in consumer and spending, the output in the United States fell dramatically. This downturn in the economy also impacting the rest of the world, especially in Europe, the unemployment rates were increasing, many farmers struggled in finding jobs, educated American experienced a lot of hardship of getting into their profession, all due to a monumental decline in aggregate demand. Great Depression negatively affected American’s lives and culture. The unemployment rates were rising dramatically, businesses failed, and stocks (especially who purchased margin stocks) were completely wiped out. Many banks were forced to close down, or to prevent bankruptcy, leaving many American lives in poverty and struggling with their destitution.…

    • 1067 Words
    • 5 Pages
    Improved Essays
  • Great Essays

    Because of the drop in consumer demand, American manufactures began decreasing the production of consumer goods. As American industrial production declined, workers were made redundant and unemployment grew, causing American consumer spending and business investment to drop even further. Therefore, the Great Depression in the US deepened in the early 1930s. At the same time, other countries also experienced economic problems which worsened as the effects of staggering economies in large countries like the United States and Great Britain spread around the world. Canada was hit especially hard because 33 percent of its gross national income was derived from…

    • 2455 Words
    • 10 Pages
    Great Essays
  • Superior Essays

    They lost everything they owned and the rural banks collapsed due to no payments from the farmers. In urban areas, workers did not make enough money and could not afford to pay for consumer goods. The multiplier effect soon took place and many employees were laid off and companies went out of order due to not receiving income. All of these factors together put America 's economy in a fragile state that it couldn 't handle for long. Eventually the economical structure couldn 't handle the load anymore and collapsed, resulting in the decade long Great depression which changed every Americans…

    • 1662 Words
    • 7 Pages
    Superior Essays
  • Superior Essays

    America has gone through many hard times before, but never has it suffered a burden as profound and extensive as the Great Depression. The Great Depression was a dark period of groundbreaking decline in economic activity in the United States that lasted from 1929 to 1939. This impacted the lives of millions of Americans ranging from wealthy business owners to families living in poverty. Not only was this depression an economic catastrophe, but it was a social and political catastrophe as well. Over the course of these few years, consumer spending and investment dropped significantly which in turn caused steep declines in industrial output and increased levels of unemployment as failing companies laid off workers.…

    • 1391 Words
    • 6 Pages
    Superior Essays