You are on page 1of 4

The Great Depression

Name: SYED Ahmed Ullah SHAH.

Study: MACRO ECONOMICS. Assignment No:1st Date: 12 March 2012 Teacher:

The economy reached bottom in the winter of 1932–33. rose to 25%. tax revenue. The Great Depression began with the Wall Street Crash of October. profits and prices dropped. and in some countries rose as high as 33%. poverty. plunging farm incomes. Personal income. the net effect was a sudden and general loss of confidence in the economic future. The Great Depression had devastating effects in virtually every country. Cities all around the world were hit hard. Construction was virtually halted in many countries. Farming and rural areas suffered as crop prices fell by approximately 60%.The Great Depression History: The Great Depression was a severe worldwide economic depression before World War II. mining. rich and poor. areas dependent on primary sector industries such as cash cropping. The market crash marked the beginning of a decade of high unemployment. Although its causes are still uncertain and controversial. and logging as well as durable goods like automobiles and appliances that could be postponed. especially those dependent on heavy industry. 1929 and rapidly spread worldwide. It was the longest. when the Recession of 1937 brought back 1934 levels of unemployment. most widespread. low profits. Facing plummeting demand with few alternate sources of jobs. and deepest depression of the 20 th century. mining and logging suffered the most. but in most countries it started in 1929 and lasted until the late 1930s or early 1940s. and lost opportunities for economic growth and personal advancement. shipping. then came four years of very rapid growth until 1937.S. The timing of the Great Depression varied across nations. agriculture as dust-bowl conditions persisted in the agricultural heartland. deflation. Unemployment in the U. while international trade plunged by more than 50%. Industries that suffered the most included construction. .

Bank deposits were uninsured and thus as banks failed people simply lost their savings. Surviving banks. come down from the high of 25% in 1933. This then led to a reduction in the number of items produced and thus a reduction in the workforce.S.S.. recovery began in early 1933. GDP returned to its upward slope in 1938. . unsure of the economic situation and concerned for their own survival. 3: Reduction in Purchasing Power: With the stock market crash and the fears of further economic woes. stopped being as willing to create new loans. did not return to 1929 GNP for over a decade and still had an unemployment rate of about 15% in 1940.Causing Behind The Great Depression: 1: Stock Market Crash of 1929: Many believe that the stock market crash that occurred on Black Tuesday. which effectively raised reserve requirements.000 banks failed. it was one of the major causes that led to the Great Depression. October 29. causing a monetary contraction that helped to the recovery. 1929 is one and the same with the Great Depression. but the U. Recovery From The Great Depression: In most countries of the world. 2: Bank Failures: Throughout the 1930s. The common view among mainstream economists is that Roosevelt's New Deal policies either caused or accelerated the recovery. individuals from all classes stopped purchasing items. although his policies were never aggressive enough to bring the economy completely out of recession. In fact. recovery from the Great Depression began in 1933. In the U. The unemployment rate also rose above 25% which meant even less spending to help alleviate the economic situation. over 9. Two months after the original crash in October. stockholders had lost more than $40 billion dollars. One contributing policy that reversed reflation was the Banking Act of 1935.

Effects Of The Great Depression: Effects of depression in the U. about http://video.  13 million people became unemployed.wikipedia.000 banks went out of business.  Nine million savings accounts had been wiped out between 1930 and the stock market lost almost 90% of its value.  Between 1929 and 1933. 34 million people belonged to families with no regular full-time wage earner. U. 25% of all workers and 37% of all nonfarm workers were unemployed.  From 1929 to 1932.htm .  There were two million homeless people migrating around the http://en.  Industrial production fell by nearly 45% between 1929 and 1932. GDP fell around 30%. References: http://en.about.  In 1933.  Homebuilding dropped by 80% between the years 1929 and 1932.S. In 1932.  Over one million families lost their farms between 1930 and 1934.  Many people became ill with diseases such as tuberculosis.