decline of Great Depression : LUSENET : Economic History (and Related Observations) : One Thread

What caused the decline of the U.S. economy in the Great Depression?

-- Ronald Lafradez (, July 07, 2002


The cause of the great dperession, is in great part due to expectation. During world war one, there was full employment, many people and raw materials were needed to construct the equipment needed for the war. With the country in full employment, the population was prospering, everybody had money. They started buying cars and homes, and other such expenses. Companies like GM were doing very well. People began buying shares in such companies. But there is only so many cars and homes, one family needs... When the greater population owned these, the general demand bega to drop,causing company share values to decline. People were afraid to loose money and everyone sold their shares. People were so eager to get rid of them that they sold them for ridiculously low prices and lost a lot of money. The stock market crashed and the great depression was pushed into existance.

-- melanie (, April 22, 2003.

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