What economic factors and conditions converged in the late 1920s to plunge the nation into the Great depression?

Answer 1

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.

Answer 2

1. Unequal distribution of wealth. There was not a large middle class. While wages were rising for the majority of workers, they were not keeping pace with the increase in the cost of living or the wealth in the hands of the industrialists and others in the upper income classes.

2. There was over speculation in the Stock Market, which was not regulated.

Many Americans purchased stock on credit. This was known as margin buying.

3. Increased manufacturing and agricultural output, but wages that did not keep pace for the consumers to purchase all that was produced or grown. Hence, inventories increased and agricultural income remained low.

4. Buying on credit, known in the 1920s as installment buying. People purchased things like refrigerators on time, and did not have money to pay for the product in the future, when the bills became due.

5. Federal regulations on businesses also contributed to the cause. Especially favorable to the large corporations were the taxes laws which were written

to encourage business expansion.

6. Banks were permitted to speculate in land and the Stock Market with little

government regulations.

7. High tariffs and war debts helped spread the depression world wide.

8. The Stock Market Crash of 1929 signaled the beginning of the Great Depression.

Answer 3

i have no clue im trying to find out my self

Answer 4

uneven distribution of income between the rich and the poor

Answer 5

the 1929 stock market crash, bank failures, a reduction in purchasing, economic policies with Europe, ad drought conditions.

Answer 6

People buying excessive stocks on margin