(a) Describe the factors that led to the
Great Depression of 1929.
[5]
Answers
Answer:
The Great Depression began around 1929 and lasted till the mid 1930s. During this period, most parts of the world experienced decline in production, employment, incomes and trade. Agricultural regions and communities were the most affected.
Causes of Great Depression:
(i) Post-world war economy of the world was fragile. Agricultural over production was a problem. As prices slumped, farm produce rotted.
(ii) Many countries financed loans from the U.S.
(iii) U.S. overseas lenders panicked at the sign of financial crisis.
(iv) Thus, banks were bankrupt and were forced to close down in Europe and in the US because they were unable to recover investments, collect loans and repay depositors.
(v) American capitalists stopped all loans.
Answer:
It began after the stock market crash of October 1929, which sent Wall Street into a panic and wiped out millions of investors. Over the next several years, consumer spending and investment dropped, causing steep declines in industrial output and employment as failing companies laid off workers.