2. The Great Depression: 4 Causes & A “Spark” Farming Unbalanced economy Credit crisis International Depression “Spark” Black Tuesday

3. Cause #1 FARMING Overproduction of food for WWI then demand goes down after the war Inventions make farming easier Farmers borrow money to buy inventions (tractors, plows, seeders) Price of food goes down Farmers cannot make enough money to pay back loans

4. Cause #2 Unbalanced Economy The wealthiest 20% of the population had more money then the other 80%. Poor and middle class people could not afford to buy consumer goods Less goods sold means more goods left in warehouses/less workers needed Leads to massive unemployment

5. Cause #3 Credit Crisis Too much installment buying during the 1920’s People get into serious credit debt Banks started to foreclose on people when they couldn’t repay their loans

6. Cause #4 International Depression World economies suffer because of WWI Exports fall (other countries buy less American products) More goods are left in warehouses and prices fall Leads to massive unemployment

7. SPARK Stock Market Crash The stock market rises dramatically throughout the 1920’s People buy stocks on mere speculation (get in and get out fast) This inflates stock prices Margin buying of stocks Market crashes on October 29, 1929 Black Tuesday!

8. The Great Depression Last Until 1942