"A short history of the Great Depression, from the stock
market crash of 1929 to World War II"
The great depression was a worldwide event characterized by an economic slum which spanned North America, Europe and other industrialized countries from 1929 to 1939. The incident sparked a catastrophic crash of the stock market on the New York stock exchange in America during October 1929, while the effects lingered, as stocks continued to fall dramatically for the next three years until 1932, when they decreased from the original value they had in 1929. Consequently, with the crash of the market and grossly devalued stocks, individual investors went financially bankrupt while banks and financial institutions were ruined and became insolvent. The impact on the economy was also rapid as with the weak financial outlook in the bleak economy, consumers lacked confidence to spend their reduced wealth. With the reduced demand and spending on the economy, companies lacked incentive to produce, which drastically further eroded the economy and compounded the challenges. In addition, without the demand to produce, companies ceased employing and this led to a rise in unemployment. In sum, the great depression created a chain reaction where the stock market crashed and eroded the value of stocks and depleted the wealth of both individuals and financial institutions. With a reduced spending power, consumers were unwilling or unable to consume and spend thereby decreasing demand for goods and services. As a result of this decline in demand, companies could not produce and were forced instead, to reduce employment which further aggravated the problems and led to increased unemployment. Subsequently, people could not afford goods and services without jobs, and companies could not employ if they did not have a market to purchase the goods and services they produced. Unemployment reached as high as 30% of the total workforce. As with all major events which occur in...
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