4 causes essay Flashcards
what are the 4 causes
stock market crash of 1929, bank failures, dust-bowl, wheat price drop
intro
The Great Depression was a severe economic crisis that occurred in the 1930s and had far-reaching consequences on the global economy. Several factors contributed to the onset of the Great Depression, including the stock market crash of 1929, bank failures, dust-bowl, and the wheat price drop
stock market crash of 1929
The stock market crash of 1929 is one of the most significant events leading to the Great Depression. On October 24, 1929, also known as Black Thursday, the stock market witnessed a massive sell-off. It led to a chain reaction of panic selling, causing the market to lose 11% of its value in one day. The crash marked the end of a decade-long bull market and caused significant financial losses for many investors.
bank faliures
Bank failures were another significant cause of the Great Depression. During the 1920s, many banks had overextended themselves by investing in the stock market and offering risky loans. When the stock market crashed, banks lost their assets and were unable to meet their depositors’ demands for cash. As a result, many banks failed, and people lost their savings, further exacerbating the economic crisis.
dust bowl and wheat price drop
period of severe dust storms that greatly damaged the ecology and agriculture of North American prairies. Impossible for farmers to grow crops. Farmers abandoned their land and migrated in search of employment and income. Farmers lost their purchasing power from other businesses. Declined demand, production, and employment. increase in agricultural production (new technology increased efficiency). Surplus of crops, decrease in demand. Wheat prices dropped, farmer profit declined. Slowdown in business activity.
conclusion
In summary, the Great Depression was caused by a combination of factors, including the stock market crash of 1929, bank failures, reduced consumer spending, and protectionist trade policies. These factors led to a sharp decline in economic activity, high unemployment, and significant hardship for millions of people.
