What were the causes of the great depression in USA 1929 . what was its effect on germany
Answers
The causes of the Great Depression in the early 20th century have been extensively discussed by economists and remain a matter of active debate. They are part of the larger debate about economic crises.
The specific economic events that took place during the Great Depression have been studied thoroughly: a deflation in asset and commodity prices, dramatic drops in demand and credit, and disruption of trade, ultimately resulting in widespread unemployment (over 13 million people were unemployed by 1932) and hence poverty. However, historians lack consensus in determining the causal relationship between various events and the government economic policy in causing or ameliorating the Depression. The initial stock market crash triggered a "panic sell-off" that made the stock market go even lower.
Although a common belief is that the Great Depression was triggered by the 1929 crash of the stock market,
the stock market in 1929 had reached record fundamental valuations in
spite of deteriorating economic conditions such as rising unemployment,
overproduction (excess capacity), underconsumption
and high debt. The timing of the crash coincided with news that the
proposed import tariff on manufactured products was losing support in
Congress.
At the end of the First World War, Germany became a democratic republic known as the Weimar Republic. The government was unable to deal with the economic crisis left by the war.
In 1923, France occupied the Ruhr Valley, the heartland of German industry, because Germany was unable to pay war reparations demanded by the Treaty of Versailles. The new Weimar Chancellor (like president) or Prime Minister succeeded in getting France to withdraw, and America loaned Germany money to stabilize the German economy.
The economic situation in Germany briefly improved between 1924-1929. However, Germany in the 1920s remained politically and economically unstable. The Weimar democracy could not withstand the disastrous Great Depression of 1929.
The disaster began in the United States of America, the leading economy in the world. The American stock exchange is in the city of New York in a building on Wall Street. The Wall Street stock exchange collapsed in 1929 and the American economy collapsed with it. This event was known as the Wall Street Crash, and was the start of the Great Depression.
The Great Depression affected all capitalist economies in the world. American banks immediately withdrew the loans they had made to Germany. Businesses closed, unemployment rose and inflation was rampant. German money had so little value, that it might take a wheelbarrow full of notes to buy a few groceries!
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