list the three causes of the great depression
1. Stock Market Crash of 1929: The stock market crash in October 1929 is considered the most significant trigger of the Great Depression. Over-speculation and excessive borrowing by investors led to an unsustainable market bubble, which burst in October and marked the beginning of a downturn in the U.S. economy.
2. Bank Failures and Reduction in Consumer Spending: Following the stock market crash, many banks across the United States failed either due to their direct involvement in the market or severe withdrawals by panicked customers. These bank failures reduced the availability of credit, which led to a sharp decrease in consumer spending and investment. As businesses closed and unemployment rates skyrocketed, this further reduced consumer spending, creating a vicious cycle that deepened the economic decline.
3. Poor Economic Policies and Trade Restrictions: The protectionist policies, such as the Smoot-Hawley Tariff Act of 1930, worsened the economic situation by significantly raising import tariffs on thousands of goods, leading to reduced international trade and worsening the global economic downturn. Additionally, the Federal Reserve's monetary policy, which raised interest rates during the 1920s, restricted the availability of credit even further and exacerbated the effects of the recession.