Causes of the Great Depression

Causes of the Great Depression

1. Political Effects

   • FDR elected in 1932
   • New Deal programs increase govt. role in economy

2. Economic Effects

   • Deflation
   • Unemployment at 25%
   • Drop in production

3. Economic Cause

   • Agricultural overproduction made a lot of produce cheaper and not a lot of revenue
   • Widening gap between rich and poor
   • Stock market crash due to buying stock on margin

4. Political Causes

   • Hoover follows hands-off policy towards business
   • Few regulations in place over companies

5. Millions of people in the United States (and around the world) had no jobs

6. Countless people became homeless

7. Uneven Distribution of Wealth

8. Banking and Federal Reserve System Monetary Policies Failed to Support Failing Banks

9. 9,000 banks closed their doors between 1930 and 1933

10. Businesses also lost money