Factors responsible for economic depression of 1929
Answers
Answer:
Factors responsible for Great Economic Depression are :
• Over Production : The firt world war has given a great boost to the American industry. But the industries continued producing large scale goods even after war. This led to economic crisis.
• Reduction of U.S. Loans : The American Capitalists stopped all the loans to the European countries and this led to the reduction of production and consumption.
• Debt Burden : The countries that depended crucially on US loans were now facing an acute crisis.
• Withdrawal of US loans : Withdrawal of US loans led to the failure of some major banks and collapse at currencies such as British Pound Sterling.
• Heavy Import Duties : The US attempt to protect its economy from the depression by doubling import duties also dealt another severe blow to the world trade.
• Mechanisation : The labour saving machines and abundant agricultural production were also responsible for the economic depression of 1930s.