The Great DepressionA horrible time in history both for the people and government
World War 1 Historical Context: World War one inevitably started due to the assassination of the archduke Franz Ferdinand. This caused the tensions in Europe to skyrocket.
German War Reparations: After World War one Germany was forced to pay reparations to the countries that they harmed. They were forced to pay the reparations due to the Paris Peace Treat.
Inflation and Unemployment: Inflation is the increase in prices of natural and unnatural goods. Due to inflation businesses required more money to produce their goods. Due to the businesses needing more money it caused unemployment because they had less money to pay their workers with.
Overproduction and Under consumption: Overproduction is the production of more than what is needed. Due to inflation and unemployment rising it caused the overproduction of everything to be more impact therefor causing the rate if under consumption to go up.
Stock Market Crash: Although not the main cause of the great depression the stock market crash greatly impacted it. When the stock market crashed the cash value lowered causing inflation and later unemployment to occur.
Banks Collapse: Due to the stock market crash the banks had to crash and close. When the banks collapsed and closed millions of dollars were lost. This was all due to the stock market crash and inflation.
Effects in the US: The effects of the great depression in the US consisted of high unemployment, poverty, low profits, deflation, plunging farm incomes, and lost opportunities for economic growth and personal advancement.
Effects in Germany: The government was unable to deal with the economic crisis left by the war. The economic situation in Germany briefly improved between 1924-1929. However, Germany in the 1920's remained politically and economically unstable.
Effects of Europe: The Great Depression severely affected central Europe. The unemployment rate in Germany, Austria and Poland rose to 20% while output fell by 40%. By November 1939, every European country had increased tariffs or introduced import quotas.
The New Deal: When President Franklin Roosevelt took office in 1933, he acted swiftly to try and stabilize the economy and provide jobs and relief to those who were suffering.