explain the causes of great depression
Answers
Causes of Great Depression
The Great Depression is attributed to the combination of the following factors:
1. Tight monetary policies adopted by the Central Bank of America
2. Stock market crash of 1929
3. The failure of banks, which was the impact of the stock market crash as more people withdrew their savings from the banks leading to closure.
4. Reduction in purchases due to diminished savings
5. The passing of Smoot-Hawley Tariff or the Tariff Act of 1930, imposed high taxes on imported goods. As a retaliation for the same, trade partners imposed high tariffs on goods made in the USA, which resulted in a decline in the world trade by around two-third between the periods of 1929-34.
6. Environmental degradation by drought and farming practices did not help in soil preservation and resulted in large areas of non-agricultural land. This was known as the Dust Bowl. This was coupled with dust storms that destroyed crops and livestock.
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