Essay What Caused The Great Depression

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Throughout history there has been many Canadian economic recessions. Interestingly the cause of many of these recessions could be found and pinpointed. For example, take the largest recession in modern history, the great depression of the 1930’s. It is said that Canadian economy suffered in the 1930’s as a result of six distinct reasons. Some of the reasons for the great depression could been avoided by smart decisions by Canadian government. For example international trade tariffs and the Canadian economy's high dependence on their primary goods and United States all could have been controlled and their effects on sending Canada into an economic recession minimized. However, other causes of the great depression such as the collapse of stock …show more content…

In the late 1920’s and early 1930’s many companies would overproduce products. For example in 1930 the Ford factory in Windsor would produce 400,000 cars even though the most cars they would sell in one year in the 1920’s was 260,000. Considering this, due to the overproduction of manufactured goods, the golden rule of business was broken as supply was higher than demand. This would create an imbalance between supply and demand. As a result companies would lower the price of their goods in order to rid themselves of excess products and lower production in order to increase the demand of their products. This created a system where companies would make little to no profit on sales and lay many people off in order to decrease production. Hence creating a boomerang effect where the economy, many individuals economic situation and business as a whole would suffer. Not to mention this likely could have been easily been avoided if the golden rule of business was followed and a balance remained between the supply and production of products and demand for these products in the 1930’s. To summarize overproduction in the 1920’s and 30’s would result in many people losing jobs and would weaken the economy, which resulted in the creation of the conditions that would result in the great

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