The Extent to Which Poor Economic Management of the Great Depression Impacted Australia from the 1920s to 1930s

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The Great Depression was a period of economic contraction and rising unemployment between 1929 and 1933 in Australia and throughout the rest of the world. The Great Depression followed a period of global prosperity and it was triggered by the Wall Street stock market crash on the 24 October 1929 in New York City. A depression is a period of time when the national income falls substantially and results in depleted money reserves causing economic contraction. The Federal Government contributed to the severity of the Great Depression in Australia, as it did not deal with the problem effectively because it delayed the response to the economic disaster and forced the country into tough times. During the Great Depression Australia was burdened by several economic catastrophes made worse by poor leadership within the Australian Government. The Australian Government did not effectively deal with the Great Depression; there was disunity within the government, a lack of education and understanding, a poor financial regulatory framework and fiscal mismanagement. Australia relied heavily upon exporting primary products to countries around the world, but the demand for goods drastically decreased during the Great Depression, greatly burdening the Australian Economy.

There was disastrous mismanagement of the Australian economy throughout the period of the Great Depression. During the 1920s the Australian government borrowed enormous sums of money from Britain and the United States of America, on the basis that they would be able to repay loans at a later date (“Bankers Serious Warning”, 1928). This was an effective plan to stimulate the Australian economy in the short term, so that throughout the early 1920’s there was a sense of great prosperity. However, when the economic catastrophe of the Great Depression came to Australia in October of 1929, the Australian government realised they were unable to repay the loans. As a result of this a representative on behalf of...
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