CAUSES OF DEPRESSION

Question 1

NAME THE FIVE CAUSES OF DEPRESSION

Answer 1

DECLINE IN BRITISH INDUSTRY
COMPETITION FORM ABROAD
NEW MARKETS
OBSOLETE METHODS
WALL STREET CRASH

Question 2

DECLINE IN BRITISH INDUSTRY

Answer 2

Britain was the first industrial nation
Profited massively from the lack of competition
Widespread industrialisation changed the market causing economic loss for GB

Question 3

COMPETITION FROM ABROAD

Answer 3

Foreign competitors could produce goods at a price small British companies could not compete with
USA and Japan were the biggest competitors

Question 4

NEW MARKETS

Answer 4

Finding New Markets to sell goods became harder
Britain had no import tax (free trade) making foreign goods cheap
GB had to pay tax to sell their own goods abroad
Lack of trade had a negative impact on the shipbuilding industry

Question 5

OBSOLETE METHODS

Answer 5

In the 1920s the USA pioneered mass production in the car making industry
GB obsolete production methods were no longer efficient
GB was slow to take advantage of new industries like chemicals and car making

Question 6

WHEN WAS THE WALL STREET CRASH ?

Answer 6

OCTOBER 1929

Question 7

WHAT CAUSED THE WALL STREET CRASH ?

Answer 7

Panic selling of shares on Wall Street led to a loss of confidence in the financial markets
Share prices crashed causing the collapse of the US stock market

Question 8

WHAT WAS THE RESULT OF THE WSC ?

Answer 8

It caused a slump in international trade
The US recalled all loans worsening the state of the global economy
Businesses went bust causing mass unemployment
Unemployment caused orders to decline even more vicious cycle