Great Depression

Definition

The Great Depression was a severe worldwide economic downturn that lasted from 1929 until the late 1930s, marked by massive unemployment, significant declines in consumer spending, and widespread poverty. Its effects rippled across nations, leading to political instability, social unrest, and changes in government policies as countries struggled to recover.

5 Must Know Facts For Your Next Test

1. The Great Depression began with the Stock Market Crash of 1929, which wiped out millions of investors and triggered a banking crisis.
2. At its peak, unemployment in the United States reached about 25%, with millions of people struggling to find work and support their families.
3. Globally, economies faced contraction and deflation, leading to a decline in international trade and further economic isolationism among nations.
4. Governments implemented various responses, such as the New Deal in the U.S., aimed at providing relief for the unemployed, stimulating economic recovery, and reforming financial systems.
5. The Great Depression contributed to the rise of extremist political movements in several countries, as people sought solutions to their economic woes, which played a role in the lead-up to World War II.

Review Questions

• How did the Great Depression impact global economies and lead to changes in government policies?
  • The Great Depression caused severe economic contractions worldwide, leading many governments to rethink their economic policies. Countries experienced skyrocketing unemployment and poverty levels, prompting them to implement measures aimed at recovery. This included government intervention in economies through public works programs and financial reforms to stabilize markets. These shifts helped reshape the role of government in economic matters for decades to come.
• In what ways did the social consequences of the Great Depression contribute to political instability in various countries?
  • The social consequences of the Great Depression, such as widespread unemployment and poverty, fostered resentment and disillusionment with existing political structures. This unrest provided fertile ground for extremist movements, as people sought radical solutions to their dire circumstances. In many cases, this instability led to shifts toward authoritarian regimes or significant political changes as citizens demanded new leadership and direction.
• Evaluate how the Great Depression set the stage for World War II by examining its effects on international relations and national policies.
  • The Great Depression significantly altered international relations and national policies, creating an environment ripe for conflict. Economic hardships led nations to adopt isolationist stances and focus on internal problems rather than global cooperation. This lack of collaboration contributed to rising tensions between countries, as some sought aggressive expansionist policies to divert attention from domestic issues. Ultimately, these dynamics fostered an atmosphere of mistrust and competition that played a key role in igniting World War II.

Related terms

Stock Market Crash of 1929: A dramatic collapse of stock prices that occurred in late October 1929, which marked the beginning of the Great Depression and severely undermined public confidence in the economy.

New Deal:

A series of programs and reforms initiated by U.S. President Franklin D. Roosevelt in response to the Great Depression, aimed at economic recovery, job creation, and social welfare.

Unemployment:

The state of being without a job despite being willing and able to work, which skyrocketed during the Great Depression as businesses closed and economies contracted.