The Main Causes Of The Great Depression
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Written by Carole Anne Tomlinson 05 December, Deflation The Great Depression, which generally is considered to have begun with the stock market crash in Octoberchanged the way America worked 1 2. At the end of the Roaring Twenties when the stock market and the economy soared, the crash appeared inevitable in retrospect. More goods were being produced than were needed, and without people to buy them, jobs disappeared. The event was a part of a spiral that ended with production of materials for World War II. Deflation, the opposite of inflation, occurs when the basic value of money goes up.
When too many goods are available, the price goes down, so money essentially is worth more.
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For example, during the s, there was a dramatic expansion of office space in cities, particularly New York City. This meant that office space could be found all around the city, so prices went down--but no one was occupying the space. A prime example is the Empire State Building, begun in and opened in Its stories went largely unoccupied throughout the Depression, and the building did not become profitable until 1 2. Demand Learn More During the s, the United States was furiously producing products from automobiles to radios that were being purchased largely on credit.
Dwpressionthe markets were saturated with such products and demand began to fall. Because of the runs on banks and the frantic sell-off of stocks, credit became hard to get even for those wanting a new car. Once there was a major backlog of products no one was buying, there was little money coming into the companies that made the products.
This resulted in massive layoffs of workers throughout the country.]
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