Explain The Conditions And Events That Led To The Great Depression
What conditions and events led to the Great Depression?
The question of a country’s economic affairs is quite a delicate issue. By definition, the economy is regarded as the prevailing conditions in a country with regards to the country’s cash flows, and the production and consumption of different commodities. On this premise, there are usually three economic states that a country might experience. These are economic stability, economic boom, or economic depression. Economic stability is whereby the country experiences minor changes either upwards or downwards on its cash flows, production, and consumption rates. An economic boom, on the other hand, is a situation whereby the country experiences significant rates of economic growth. On the other hand, in during an economic depression, the country experiences reduced cash flows, production and consumption issues hence a negative growth. The great depression of 1929 is a classic example of the effects depression can have on a countries economy. During that time, many companies and businesses were closed, the rates of unemployment significantly increased, the level of poverty and …show more content…
The American population’s ability to spend on consumer products were adversely affected many goods and products remained in the retail shops and warehouses as dead stock (Gutscher). These events had a ripple effect on the production process as most factories could not continue with production since the already produced goods had not yet been sold to generate revenue for acquiring raw materials and cater for operational costs and employee salaries. These events led to the further crisis as companies and factories were forced to lay off workers as they could no longer afford to pay them. This was a lose-lose situation for the workers as they had lost both their jobs and their investment in the stock markets of these companies. Ultimately, several companies were forced to shut
The question of a country’s economic affairs is quite a delicate issue. By definition, the economy is regarded as the prevailing conditions in a country with regards to the country’s cash flows, and the production and consumption of different commodities. On this premise, there are usually three economic states that a country might experience. These are economic stability, economic boom, or economic depression. Economic stability is whereby the country experiences minor changes either upwards or downwards on its cash flows, production, and consumption rates. An economic boom, on the other hand, is a situation whereby the country experiences significant rates of economic growth. On the other hand, in during an economic depression, the country experiences reduced cash flows, production and consumption issues hence a negative growth. The great depression of 1929 is a classic example of the effects depression can have on a countries economy. During that time, many companies and businesses were closed, the rates of unemployment significantly increased, the level of poverty and …show more content…
The American population’s ability to spend on consumer products were adversely affected many goods and products remained in the retail shops and warehouses as dead stock (Gutscher). These events had a ripple effect on the production process as most factories could not continue with production since the already produced goods had not yet been sold to generate revenue for acquiring raw materials and cater for operational costs and employee salaries. These events led to the further crisis as companies and factories were forced to lay off workers as they could no longer afford to pay them. This was a lose-lose situation for the workers as they had lost both their jobs and their investment in the stock markets of these companies. Ultimately, several companies were forced to shut