What caused the Great Depression?

What caused the Great Depression?

1. The Economy

   • CAUSES
     • Over Production
       • Industry and Agriculture
         • over produced products beyond the demand
           • Business cut production
             • Workers suffered wage cuts and layoffs
               • Consumers had little money to spend
                 • Demand fell for good
                   • Repeat the cycle
         • Farm Crisis caused Europeans to stop buying American produce
     • The widening gap between rich and poor
       • 1% of Americans owned over 33% of all American assets
       • The rich saved lots of money and disrupted the economy's monetary flow
     • Stock market crash
       • Caused by buying on the margin
       • Stock brokers selling their shares for stronger British shares
   • Effects
     • Deflation
     • Unemployment at 25%
     • Drop in Production

2. Politics

   • Causes
     • Hoover's no government interference with business policy
     • Few governmental regulations
   • Effects
     • FDR elected 1932
     • New Deal programs increased government role in the economy
     • Hitler gains power in Germany because of the hyperinflation and the poverty at the time