Explain and describe the causes of the Great Depression.
All answers MUST be in complete sentences.
The Great Depression was caused by a combination of factors. One major factor was the stock market crash of 1929, which saw a sudden and dramatic decrease in stock prices. This caused panic among investors and led to a widespread loss of confidence in the economy.
Another contributing factor was overproduction and underconsumption. Industries were producing more goods than people could afford to buy, leading to a surplus of products and a decrease in demand.
The Federal Reserve also played a role in causing the Great Depression. The Fed raised interest rates in an attempt to curb excessive speculation in the stock market, but this ended up restricting the flow of money and credit, making it difficult for businesses to borrow and invest.
Trade policies also had an impact on the Great Depression. The Smoot-Hawley Tariff Act of 1930, which raised tariffs on imported goods, led to retaliatory measures from other countries and a decline in international trade.
Overall, a combination of these factors led to a sharp decline in economic activity, mass unemployment, and widespread poverty during the Great Depression.