Economic development and policies - Depression(1929-32)

Question 1

How did the Wall Street Crash contribute to the Depression in Germany?

Answer 1

• US loans and investment immediately dried up. American then demanded repayment of its short-term loans.
• Demanded for exports collapsed as other countries reduced their imports - world trade slumped.
• Without overseas loans and export trade falling, prices and wages fell and bankruptcies increased

Question 2

How far did the Wall Street Crash contribute to the Depression in Germany?

Answer 2

Even without the Wall Street Crash, the German economy would probably had faces a serious depression. The WSC was the final push that brought the Weimar economy crashing down - it determined the timing of the Depression, and made the effects much worse. But it was not the only cause of Germany’s Great Depression.

Question 3

Name 4 effects the Depression had on Germany’s economy

Answer 3

1. National income shrunk by 39% between 1929-32.
2. Number of unemployed rose to over 6 million. 1/3 of people of working age were jobless.
3. 50,000 business went bankrupt.
4. 5 major banks collapsed in 1931.