Describe At Least Three Causes Of The Great Depression
1) Describe at least three causes of the Great Depression. Be specific in your response. (Hint: Your answer should be at least a paragraph).
There were many events that triggered the Great Depression. One of them being industry troubles. Mining and lumber production were no longer in high demand because the war had subsided. Coal mining was becoming obsolete to hydroelectric fuel, fuel oil, and natural gas. The boom of cars, construction, and consumer goods also diminished. Less houses were being constructed. Railroads were losing business to trucks, buses, and cars. The entire economy was changing, which resulted in an economic depression. Another cause of the depression was the loss of business for farmers. The international demand of corn and wheat fell after the war, which meant the crop price reduced 40% or more. Farmers went into debt. The agriculture business dropped from $10 billion in 1919 to $4 billion in 1921. Farmers were defaulting their loans, which made the rural banks collapse. Another large reason the depression occurred is because of the uneven distribution of income. The poor were getting poorer, and the rich were getting richer. About half of urban American homes were without electricity and/or heat. 70% of American were paid a salary less than the minimum amount required to live with a reasonable …show more content…
Define it in your own words and explain why credit was one of the causes of the Great Depression.
A credit is an contract in which shoppers agreed to purchase now and pay later for goods (in the shape of an installment plan with many interest bills). Many Americans were living beyond their funds because of this credit system. Businesses essentially encouraged people to collect great debts. People had difficulty with (or could not) paying their debts. Because of this, costumers ceased spending, which harmed the economy.
3) Define speculation and buying on margin. Why would these practices be harmful when trading
There were many events that triggered the Great Depression. One of them being industry troubles. Mining and lumber production were no longer in high demand because the war had subsided. Coal mining was becoming obsolete to hydroelectric fuel, fuel oil, and natural gas. The boom of cars, construction, and consumer goods also diminished. Less houses were being constructed. Railroads were losing business to trucks, buses, and cars. The entire economy was changing, which resulted in an economic depression. Another cause of the depression was the loss of business for farmers. The international demand of corn and wheat fell after the war, which meant the crop price reduced 40% or more. Farmers went into debt. The agriculture business dropped from $10 billion in 1919 to $4 billion in 1921. Farmers were defaulting their loans, which made the rural banks collapse. Another large reason the depression occurred is because of the uneven distribution of income. The poor were getting poorer, and the rich were getting richer. About half of urban American homes were without electricity and/or heat. 70% of American were paid a salary less than the minimum amount required to live with a reasonable …show more content…
Define it in your own words and explain why credit was one of the causes of the Great Depression.
A credit is an contract in which shoppers agreed to purchase now and pay later for goods (in the shape of an installment plan with many interest bills). Many Americans were living beyond their funds because of this credit system. Businesses essentially encouraged people to collect great debts. People had difficulty with (or could not) paying their debts. Because of this, costumers ceased spending, which harmed the economy.
3) Define speculation and buying on margin. Why would these practices be harmful when trading