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The Great Depression

The Great Depression is the historical worldwide long-lasting and the most severe economic down turn which was experienced between 1929 and 1939, in the western developed world. The Great Depression started right away after the crash of the stock market towards the end of the year 1929 which led to panic of the Wall Street and traumatized millions of the shareholders. In the following years, consumer investments and spending dropped severely. The Great Depression led to severe impacts on the economic theory, economic institutions and microeconomic policy.

Although The Great Depression began in the United States of America, it caused radical fall in output, acute deflation and high rise of unemployment almost in every nation in the world. In 1933, The Great Depression had reached the depths of despair. By that time, almost half of the banks in United States of America had collapsed and Over 13 million Americans were jobless.

In 1930, President Franklin D. Roosevelt put up measures to reform and relief the depth of The Great Depression, the America economy did not fully recover until when the Second World War rejuvenated the industries into high gear in 1939. The United States of America experience the harshest adversity of The Great Depression to extend that even cultural and social effects were staggering.

The Stock Market Crush of 1929

In the summer of 1929, the economy of the America entered an ordinary downturn as consumer spending fall drastically thus unsold stock began to accumulate leading to slowing manufacturing. Due to persistence of The Great Depression, the prices of the goods kept going up and by the end of the year 1929; the prices had got to a level that anticipated future consumer’s income could not justify them. The stoke market experienced abnormal sales of the shares due to continued down turn in stock market.

The confidence of the consumers vanished as a result of the crash of the stock market. The Great Depression brought about the down turn in investments and spending thus leading to business and manufacturing companies to slow down constructions and productions and hence begin to fire their employees. The consumer’s purchasing power fall as a result of unemployment and low wages to those retained their jobs.

Hard Road to Recovery

The Tennessee Valley Authority (TVA) is among the institutions and programs of the New Deal which assisted in the recovery from The Great Depression. The Tennessee Valley Authority constructed hydroelectric projects and dams to provide electric power and control flooding to the southern region. The Works Project Administration (WPA), was also established which helped to create permanent employment opportunities to the millions of the people. This signified the end of The Great Depression after a decade of severe economic down turn.


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