The American Great Depression of 1929 was a severe Great Depression, due to which the entire American economy was shaken. This Great Depression continued from 1929 to 1939. The following factors were responsible for the Great Depression of 1929…
- In 1929, the US economy was completely shaken by the US stock market crash. Due to this there was a huge reduction in investment and expenditure in America.
- By the early 1930s, many banks were in dire financial straits and lacked sufficient funds to make loans.
- The gold standard forced foreign central banks to raise interest rates to correct the trade imbalance with the US, which reduced consumption and investment in many other countries.
- After the First World War, excessive machinery was purchased by farmers to increase production, due to which the problem of excessive debt also arose and the level of production increased very much.
- Many companies were forced to sell their goods at a cheaper rate due to the high rate of production compared to consumption.
- The unemployment rate continued to rise due to economic losses and layoffs, reaching 24.9% in 1933.
In this way, these factors were the main factors of the American Great Depression of 1929.
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