The Great Depression Essay
The Great Depression
The Great Depression caused the poor to become poorer and the rich were not affected as much. Some of the rich misunderstood people because of their economic situation. Great Depression was one of the most stark economic situations the world had seen. It all started during mid 1900’s and lasted till 1939. The effects of the Great Depression were seen all over the whole world with high unemployment, low production and deflation. Some examples of effects were, Stock Market Crashes, Bank Failures,etc. This problems left the government ineffective which lead the global economy ‘’Great Depression.” What is the cause or what lead to Great Depression? This issue is still an argument between economists.
After the era of World …show more content…
After World War I, many countries, both new and existing abandoned the use of Gold Standards and adopted flexible currency system so they could print the money to pay for the war effects. Although, US had not abandoned the Gold Standard in its economy, but still there is an constant debate about the role of gold standard in limiting U.S. monetary policy.
It was the Great Britain, out of all the economies, which was largely affected by the Gold Standard. After it abandoned the use of Gold Standards in 1925, Britain decided to return to Gold Standard at prewar parity. Going back to prewar equality means adopting low prices in the economy, low output and high unemployment. With increase in interest rates not only British Economy but other economies which were dependent on pound sterling and British Capital Markets were largely affected and a large decrease in consumer spending was seen which was because of high unemployment. However, the effect was not only restrained to Britain but also in other countries that depended on the pound sterling and British Capital Market for their financing. Later, on September 1931, the British government decided to go off the gold standard and pound sterling criticized by one third of its value on the foreign exchange market. It was all because of first collapse and then restoration
The Great Depression caused the poor to become poorer and the rich were not affected as much. Some of the rich misunderstood people because of their economic situation. Great Depression was one of the most stark economic situations the world had seen. It all started during mid 1900’s and lasted till 1939. The effects of the Great Depression were seen all over the whole world with high unemployment, low production and deflation. Some examples of effects were, Stock Market Crashes, Bank Failures,etc. This problems left the government ineffective which lead the global economy ‘’Great Depression.” What is the cause or what lead to Great Depression? This issue is still an argument between economists.
After the era of World …show more content…
After World War I, many countries, both new and existing abandoned the use of Gold Standards and adopted flexible currency system so they could print the money to pay for the war effects. Although, US had not abandoned the Gold Standard in its economy, but still there is an constant debate about the role of gold standard in limiting U.S. monetary policy.
It was the Great Britain, out of all the economies, which was largely affected by the Gold Standard. After it abandoned the use of Gold Standards in 1925, Britain decided to return to Gold Standard at prewar parity. Going back to prewar equality means adopting low prices in the economy, low output and high unemployment. With increase in interest rates not only British Economy but other economies which were dependent on pound sterling and British Capital Markets were largely affected and a large decrease in consumer spending was seen which was because of high unemployment. However, the effect was not only restrained to Britain but also in other countries that depended on the pound sterling and British Capital Market for their financing. Later, on September 1931, the British government decided to go off the gold standard and pound sterling criticized by one third of its value on the foreign exchange market. It was all because of first collapse and then restoration