Explain the causes of the Great Depression.
Answers
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of 05. Stock Market Crash of 1929. ...
Bank Failures. A crowd of depositors outside the American Union Bank in New York, having failed to withdraw their savings before the bank collapsed, 30th June 1931. ...
Reduction in Purchasing Across the Board. ...
American Economic Policy With Europe. ...
Drought Conditions.
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Answer:
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Explanation:
The Great Depression was a result of a number of factors as mentioned below =>
(i) Prosperity in the USA during the 1920s created a cycle of higher employment and incomes. It led to a rise in consumption and demands. More investment and more employment created tendencies of speculations which led to the Great Depression of 1929 upto the mid-1930s.
(ii) The stock market crashed in 1929. It created panic among investors and depositors. They stopped investing and depositing which resulted in a cycle of depreciation.
(iii) Failure of the banks: The withdrawal of US loans had a worse impact on the money investment systems. In Europe, it led to the failure of most of the major banks. Some of the banks closed down when people withdrew all their assets, leaving them unable to invest. Some banks called back loans taken from them at the same dollar rate inspite of the falling value of dollar.
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