Q1 Describe five major effects of Great Economic Depression of 1929 on the
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Answer:
The Great Depression is referred to as the greatest and also the longest economic downturn or recession in modern history. It started in the USA and after that, had a rippling effect on the economies of the world.
It is said that the Great Depression started with the USA stock market crash in October 1929. To be precise, the stock market crashed on October 24, 1929, which is known in American history as the “Black Thursday”.
The impact of crashing of the stock market resulted in panic among the investors in Wall Street, wiping out almost $30 billion from the stock market. This resulted in the crashing of other major financial institutions such as banks.
It is said that around 5000 banks went bankrupt as an aftermath of the stock market crash of 1929. One of such banks was Boden-Kredit Anstalt, which was Austria’s most important bank.
There was a significant drop in consumer spending and investments that caused a major decline in industrial output and laying off employees from companies.
By 1933, the unemployment rate had risen to 25%, and the GDP of the USA contracted to half of its value due to deflation. Around 15 million jobs were lost in the economy.
The other significant impact of the Great Depression was that many farmers lost all their properties due to the drought and over-cultivation in Midwest America. This was termed as the “Dust Bowl” which destroyed agricultural lands.
Explanation:
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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.