What caused the Great Depression?
History
ScanSolve AI Answer
Answer
The Great Depression (1929–1939) was the worst economic downturn in modern history.
Causes:
- Stock market crash (October 1929): Overspeculation and buying on margin created a bubble that burst
- Bank failures: Over 9,000 banks failed, wiping out savings
- Overproduction: Factories and farms produced more than people could buy
- Tight monetary policy: The Federal Reserve raised interest rates instead of expanding money supply
- Smoot-Hawley Tariff: High tariffs triggered trade wars, reducing global trade by 65%
Impact: 25% unemployment in the US, global GDP fell ~15%, recovery didn't fully come until WWII mobilization. Led to the New Deal programs and modern economic regulation.
Was this helpful?
Still stuck on this one?
Ask a follow-up, and the answer starts from this question.
Got a different question?Ask your own question
More History Questions
QWhat caused World War I?QWhat are three reasons the U.S. economy seemed strong during the 1920s? What does “buying on margin”…
Browse by topic:US History