Answer to Question #243987 in History for neo

Question

Discuss the causes of the worldwide Great Depression in the 1930s and the reasons for the eventual economic recovery.

Answer 1

It began after the stock market crash of October 1929, which sent Wall Street into a panic and wiped out millions of investors. Over production of consumer goods also played a role in the great depression as it lead to the fall in demand and purchase of goods.

GDP recovered from the Depression because the combined total of investment, government purchases and net exports grew to a level that pushed GDP to full employment and the full utilization of capacity. Thus business saw the need for additional capacity and hence investment recovered.