Causes of the Great Depression

Economic growth declined during the late 1920s. Why? Overproduction- Farms and factories made too much Weak Banking- Made unsure and unwise loans

Stock purchases were made on credit. How it affected people:

Buying on Margin People paid ten percent of a stock purchase and agreed to pay the rest later. Many times the people did not have the money to do so

Corporations and individuals became overextended. How? They owed more money then they had

The stock market crash led to a cycle of low demand and high unemployment. Disasters triggered other disasters Ex) Businesses could not expand or turn to banks

The agricultural economy in the United States was in poor shape The agricultural economy in the United States was in poor shape. Reason:

Reason: The first to feel the economic effects of the Depression Wages did not keep up with the price of goods