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An economic catastrophe - Coggle Diagram
An economic catastrophe
Wall Street Crash (1929) -> econimic crisi:Greta Depression
Europe economy dependent from American markets,was too weal after ww1
main cause
enequal ditribution of wealth in 1920
extensive stock market speculation
increased manifacturing output
total supply = function properly:total demand
BUT -> oversupply of goods beacause majority of population didn't have enough money
SOLUTION -> allow credit sale (buy now,pay later)
create artificial demand
automobile + radio industries wew booming
during WW1 they were significantly improved ad now were supporting the wholw economy
NOT expand forever -> went down,employees suffered + agricolture was already declining
rich stopped spendind and slowed investments
working class\poor stopped buying things on credit for fear of losing job and not being able to pay interests
US imposed higher trade taxes -> foreigners stopped buying American products
Unemployed grew to 5mln(1930) and to 13mln(1932)
Federal Reserve Board (prevent depression)
inflate money supply by 60%
raised interest rate (wrong choice)
Roosvelt President in 1933 ->new economic program -> New Deal
National Industrial Recovery Act 1933
Agricolture Adjustmen Act 1933
National Labour Relations Act 1935
National Youth Administration 1935
Social Security Act 1935