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Essay on Great Depression

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The Great Depression

During the 1920’s America was experiencing great economic growth. As WWI was ending Americans were out of energy. For almost 100 years they had been facing the problems of sectionalism, civil war, reconstruction, imperialism, and WWI. By the end they were ready to just sit back and party. Demand sky-rocketed and brought great economic growth. Americans failed to see the great problem looming overhead though. The Great Depression was caused by a combination of factors- a natural slowdown of the business cycle, weaknesses of the 1290’s economy magnified the slowdown, the republican response failed to help, a great environmental disaster, and the collapse of the world economy all contributed to the cause of the Great
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As prices would go down farmers produced more to try and make up for it, except that as they produced more prices dropped. Fourth was that the bands were unstable. They would loan out way too much money riskily and have a low amount of reserves since there was little enforcement for these types of bank regulation. The one who was supposed to regulate them was a large business owner himself and he wasn’t to keen on interfering with business. Wo when the economy slowed down and people went back to the banks to get their money there was none to take, forcing the banks to start calling back in loans and foreclosing on people. Even with that banks still didn’t have enough money so they had to close, leaving a lot of people without money. Fifth was overspeculation which included a lot of consumer credit and margin buying. This fits in with the last explanation of what happens when the banks had to start calling in loans, but no one had the money to pay it so many were foreclosed on. Sixth was that there was a sort of overconfidence in the American people. They had this false belief that the economy was going to keep growing so they failed to save enough money to withstand the slowdown. All of these weaknesses in the 1920’s economy led to a greater slowdown of the economy leading into the Great Depression. As the economy was falling at an appalling rate
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