explain the causes of the great depression
Answers
Explanation:
Causes of Great Depression
The Great Depression is attributed to the combination of the following factors:
Tight monetary policies adopted by the Central Bank of America
Stock market crash of 1929
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.
Reduction in purchases due to diminished savings
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.
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.
Answer:
The Great Depression was a result of many factors:
Prosperity in the USA during the 1920s created a cycle of higher employment and incomes. It led to 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.
Stock market crashed in 1929. It created panic among investors and depositors who stopped investing and depositing. As a result, it created a cycle of depreciation.
Failure of the 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.