Question

What were the causes of the Great Depression? Explain in detail.

Answer 1

4 reasons

Explanation:

There are 5 primary reasons why the Great Depression began:

Stock Market Crash of 1929
The Stock Market crash in October is vastly different from when the Great Depression started, the crash then led to the Depression by the early 1930's. This was due to the banks losing more than $40 billion, thus spiraling it down towards the "Great Depression".

"The Dust Bowl"
The Dust Bowl wasn't obviously a cause of the depression (as it began in 1934, in 3 subsequent hordes). It did however, increase the longevity of the depression, as hundreds of thousands of families were forced to relocate to some distant place due to the fact that the farms were useless.

The Federal Reserve
The Federal Reserve (or simply, the Fed), are the ones that produce money for the country. In 1929, rather than producing more money in order to bail out the banks, they simply decided to cut it by 1/3rd, meaning that the stock would not have to rely on investors (or Wall Street). Wall Street refused to bail out the careless banks, and so 9,000 banks closed, meaning that the ones that did survive were extremely stingy when it comes to loans and the such. It is then obvious to see why it ended up being as bad as it did.

Purchases Stopped
When the stock market crashed, people were incredibly reluctant to purchase anything at all, due to the prices being so sporadic. When there is no money being invested, you can see how then it would collapse by itself, like a house of cards.