What Are The Causes Of The Great Depression Essay

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Pages: 4

The Great Depression surprised lots of people since it followed such successful economic growth. Numerous historians argued over the causes of the Great Depression and whether this severe long-lasting financial collapse was inevitable. The maldistribution of purchasing power with weaknesses in the consumer demand had been one of the contributing factors to the Depression. Another cause was the credit structure of the country’s economy that lead to misleading mistakes. The debt structure also lead to this financial collapse especially after World War I. Although some factors were out of the nation’s control, the Great Depression could have relatively been prevented with better decisions. The distribution of purchasing power was not at its best and it resulted in a drop of consumer demand. The production by agricultural and industrial businesses grew, however the profits going towards workers and potential consumers was not enough for the market of goods the economy produced. Wages for the working class did not increase fast enough to catch up with the rate of productivity. The greater majority of the population barely made enough to sustain themselves financially or not at all, as a result, there was not enough potential customers for other goods. Demand for goods and services was too weak due to a decline in …show more content…
A cause of the Great Depression was the uneven distribution of purchasing power leading to lesser consumer demand. Also, the nation’s credit structure was a result of unsuccessful attempts to save the economy. Another cause of the instability was the debt structure following the First World War. The Great Depression had been a devastating time for the American people, the unemployment rate reaching approximately 25 percent, but it would provide insight on further decisions to prevent such occurrence from happening