To What Extent Did World War Two Help The United States Of America Recover From The Effects Of The Great Depression

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The Great Depression To what extent did World War Two help the United States of America recover from the effects of the Great Depression? Nirbhay Bondili Historical investigation Mr. Lissina May, 1, 2017 Question: To what extent did World War Two help the United States of America recover from the effects of the Great Depression? Evaluation of sources Source 1: Steindl, Frank G. "What Ended the Great Depression? It Was Not World War II." Independent Review 12, no. 2 (2007). Frank G. Steindl is a Regents Professor of Economics Emeritus at Oklahoma State University. He focused on the theory made by Milton Friedman and Anna Schwartz of how monetary spending helped reduce the unemployment rate of the great…show more content…
Causes of the Great Depression Throughout the 1920’s the Us economy expanded rapidly and it more than doubled its wealth between 1920 and 1929. Investing in stock had gained popularity all the way from millionaires to janitors. This gained attraction also caused the stock market to expand rapidly. By 1929 production and consumption goods decreased as unemployment decreased. This trend made stock investors very concerned and nervous which made them start to sell their overpriced shares on the market. On October 29 1929 A.K.A Black Thursday over 12.9 million shares were traded that day which resulted in the stock market crashing. Thousands of millions of share which were highly inflated, now turned into worthless stocks. This crash caused many business to slow down production and fire many workers. American banks also played a role in this as a result of a banking crisis as told by Milton Friedman and Anna Schwartz. They argue that due to a result of a banking crisis in where american citizens were holding on to more money than the federal reserve could supply causing lower consumerism and lower production and employment. The federal reserve lost about 35% of monetary contraction which resulting in a 33% deflation in america’s goods. According to the Monetarist view the federal reserve did not lower interest rate or raise the monetary base for many large banks causing them to fall World war 2 America had to enter the war
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