© 2016 Pearson Education, Inc. All rights reserved.9-1 The Mother of All Financial Crises: The Great Depression How did a financial crisis unfold during.

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© 2016 Pearson Education, Inc. All rights reserved.9-1 The Mother of All Financial Crises: The Great Depression How did a financial crisis unfold during the Great Depression and how it led to the worst economic downturn in U.S. history? This event was brought on by: –Stock market crash –Bank panics –Continuing decline in stock prices –Debt deflation

© 2016 Pearson Education, Inc. All rights reserved.9-2 Figure 2 Stock Price Data During the Great Depression Period Source: Dow-Jones Industrial Average (DJIA). Global Financial Data:

© 2016 Pearson Education, Inc. All rights reserved.9-3 Figure 3 Credit Spreads During the Great Depression