What led to the breakdown prior to the Depression? There was an active debate among the economists which were a part of the economic crisis. It had been triggered by the 1929 crash of the stock market. Keynesian and institutional economists who would argue over the depression which was caused by widespread loss of confidence that lead to under consumption.
What happened during that time? The monetarists who believe that the Great Depression started as an ordinary recession, but the policy mistakes by monetary authorities such as the Federal Reserve. It had caused shrinking of the money supply that had exacerbated the economic situation which caused recession to descend in the Great Depression. …show more content…
Direct relief, economic recovery, and financial reform. Direct relief was to help 1/3 of the population that was hit hard by the Great Depression. FDR had Hoover’s FERA work relief program expanded and added the CCC, PWA, and the WPA that started in 1935. Recovery had a goal to restore the economy which most economists had considered an inflated bubble. It was involved with deficit spending and having to drop the gold standard of efforts to re-inflate the farm prices that were too low. Reform was basically based upon the assumption that the depression had been caused by an inherent instability that the government intervention to rationalize and stabilize the economy. It helped to balance the farmers interests and businesses launched a series of relief measures and welfare agencies were giving meaningful jobs to the ones who were