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As government began to realize signs of an economy downfall, the interference of the Hoover and Roosevelt Administration attempted to help through such methods as government bailouts. This eventually led to a poorer economy, especially from the ideals of the Smoot-Hawley Tariff Act of 1930 came about. With the sharp decrease in trade resulting from the tariff, the economy took a turn for the worse. The economic policies of the federal government did portray a role in the depression, but they were not entirely responsible for the collapse of the economy due to consumers, investors and businessmen.

One major impact towards the Great Depression was Government spending. Once tax receipts fell, government then increased tax rates and reduced spending. By doing this, the government was attempting to keep a balanced budget. Economists then advised the federal government to increase spending in order to help employment. The reason for the depression was the fact that the Government was receiving more money then they were spending, causing a lack of money in circulation and reducing inflation to its lowest amount.

The Federal Reserve was another impact towards the cause of the Great Depression. The Federal Reserve System tried to help the economy by cutting the money supply by one third. This action was an attempt to get rid of inflation and lower the mass amount of money that was in circulation. Businessmen could not afford new loans and also could not afford their old loans that they had already taken out. Hence, the businessmen stopped investing and purchasing stocks. This then caused businesses to fail due to the lack of money and support from businessmen. The Federal Reserve also caused banks to decrease their willingness to create loans, eventually leading to the decrease in consumption and investment.

On the other hand, the Federal Government was not the only cause of the Great Depression. Consumers, investors and businessmen also played a role. Consumers were now not purchasing the overproduction of goods that have started to become mass-produced in assembly lines and factories. Consumers were also saving their money other then spending it to buy certain goods that have been mass-produced. Businessmen stopped investing because of the fact that they could not afford to do so, and also because of the fact that investing opportunities slimmed down. Entrepreneurs failed to bring fourth new products and inventions to invest in. These situations helped towards the creation of the Great Depression, proving that not only the Federal Government caused the decline in the economy.

Overall, the Great Depression did not result only from the actions of the Federal Government, but also from consumers not spending money and purchasing items that have been mass-produced, investors not buy stocks in companies because of the lack of stocks or the lack of money, and entrepreneurs not inventing new items to attract the consumer. The Federal Government did have a major cause of the Great Depression due to deflating the economy and causing a lack of money in circulation.

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