Great Depression

Definition

The Great Depression was a severe worldwide economic downturn that lasted from 1929 until the late 1930s. It was marked by widespread unemployment, significant declines in industrial production, and a drastic drop in consumer spending. The effects of the Great Depression reshaped social and economic policies across the globe, highlighting the need for governmental intervention in times of economic crisis.

5 Must Know Facts For Your Next Test

1. The Great Depression began with the stock market crash on October 29, 1929, known as Black Tuesday, which wiped out millions of investors.
2. Unemployment rates soared during this period, peaking at around 25% in the United States, leading to widespread poverty and hardship.
3. The Great Depression led to significant changes in government policy, with many nations implementing social safety nets and regulatory measures to stabilize their economies.
4. International trade plummeted during the Great Depression as countries raised tariffs in an attempt to protect their economies, further deepening global economic woes.
5. Cultural impacts included changes in art and literature, reflecting the struggles and resilience of people during this challenging time.

Review Questions

• How did the Great Depression impact employment rates and daily life for individuals during that time?
  • The Great Depression had a profound effect on employment rates, with unemployment reaching approximately 25% in the United States at its peak. This widespread job loss led to financial hardship for many families, drastically altering daily life. People struggled to afford basic necessities, leading to increased homelessness and reliance on soup kitchens and public assistance.
• Discuss the role of government intervention during the Great Depression and how it transformed economic policy.
  • During the Great Depression, governments worldwide recognized the need for intervention to address economic failures and societal suffering. In the United States, President Franklin D. Roosevelt's New Deal introduced various programs aimed at providing relief to the unemployed, stabilizing banks, and boosting industrial production. This shift toward more active government involvement in economic matters laid the groundwork for modern welfare states and regulatory frameworks.
• Evaluate the long-term effects of the Great Depression on social attitudes toward government and economic systems in subsequent decades.
  • The long-term effects of the Great Depression fundamentally altered social attitudes toward government and economic systems. The crisis fostered a belief that governments should play an active role in regulating economies and providing for citizens' welfare. This shift influenced political ideologies for decades, leading to increased support for social safety nets, labor rights, and regulations intended to prevent future economic crises.

Related terms

Stock Market Crash of 1929: The sudden and severe collapse of stock prices in the U.S. stock market, which marked the beginning of the Great Depression.

New Deal:

A series of programs and policies implemented by President Franklin D. Roosevelt in response to the Great Depression, aimed at providing relief, recovery, and reform to the economy.

Dust Bowl: A period of severe dust storms in the 1930s that greatly damaged agriculture in the U.S. prairies, exacerbating the economic hardships during the Great Depression.