Question

I want 6 paragraph cause and effect essay about the Great Depression in 1929  one introduction paragraph, four main paragraphs, and one conclusion paragraph. using work cited

Answer 1

Intro--The great depression which started in 1929 and continued upto 1933 was a global economic downturn. The severe depression was felt by the industrialized western world and there were major changes in the macroeconomic policy,economic theory and economic institutions.It began in US but effect was felt all over the world. There was unemployment,deflation and reduction in output.In the social and cultural side, the Americans had to face a lot of unfavorable conditions since the civil war.

Causes --The main cause was decline in aggregate demand and rise in inventories.This fall in aggregate demand was transmitted to the rest of the world through the gold standard.Another cause was the stock market crash.Stock prices had risen 4 times and the Fed made attempts to increase the interest rate in order to control this.Higher interest rate led to less production.There was excess supply of housing and as a result there was fall in construction in 1928 and 1929.By 1929 US stock prices had risen much, investors lost confidence and stock market bubble burst.The stock market crash reduced aggregate demand in the US.

Panicking in the Banking sector and monetary contractions was another cause.Banking panic arose when the depositors lost confidence in the banking system and demanded their money back.So in an attempt to gather cash ,banks had to liquidate loans . Liquidation of banks caused bank failure. So all banks closed down.The panic caused a rise in the amount of crrency people had in hand as compared to deposits in bank.So money supply in US fell.The Fed also tried to reduce money supply by increasing the interest rate.So spending and investment fell.Protectionist trade policies also complicated matters.

Effect--Economic impact was devastating and there was lot of human suffering. Standard of living fell.It caused the end of the international gold standard. Fixed exchange rates were given up in favor of floating exchange rates.Labor unions grew.and US started unemployment compensation and old age pensions as social security.Macro economic policies developed which tried to balance economic upturns and downturns.Keynes suggested that increase in government spending, decrease in taxes and monetary expansion can reduce depression.Attempts were made to cope with unemployment and poverty.Novelists , poets , painters created works that dealt with problems of the great depression

Conclusion--In short by the late 1930 , Americans wanted recovery and did no want revolution,they wanted stability and national unity and were against social conflict.People craved for solace and President Roosevelt declared America would be subjected to repairment but will not be transformed.

Work--Great depression by Richard H Pells