Great Depression

Definition

The Great Depression was a severe worldwide economic downturn that took place during the 1930s, marked by significant declines in consumer spending, widespread unemployment, and a drastic fall in industrial output. This period not only reshaped economies but also had profound social and cultural impacts, leading to changes in government policies and societal structures across the globe.

5 Must Know Facts For Your Next Test

1. The Great Depression lasted from 1929 until the late 1930s, with its effects lingering into World War II.
2. Unemployment rates soared during this period, reaching as high as 25% in the United States.
3. Many banks failed, leading to a loss of savings for millions of Americans and a severe contraction of credit.
4. The global impact of the Great Depression resulted in economic turmoil in countries around the world, not just in the United States.
5. Cultural expressions during this time included literature, art, and theater that reflected themes of hardship and resilience.

Review Questions

• How did the Stock Market Crash of 1929 contribute to the onset of the Great Depression?
  • The Stock Market Crash of 1929 was a crucial trigger for the Great Depression, as it led to a massive loss of wealth and confidence among consumers and investors. Following the crash, banks faced financial instability, which resulted in failures and loss of savings for many. This created a domino effect where consumer spending plummeted, businesses closed, and unemployment skyrocketed, solidifying the economic downturn.
• Discuss the various social impacts of the Great Depression on American society during the 1930s.
  • The Great Depression had profound social impacts on American society, leading to increased poverty rates and displacement for many families. Communities faced challenges such as food shortages and homelessness, while psychological stress rose due to economic insecurity. Social structures changed as people relied more on communal support systems and government programs for relief, reshaping relationships within families and communities.
• Evaluate the effectiveness of the New Deal programs in addressing the challenges posed by the Great Depression.
  • The New Deal programs implemented by President Franklin D. Roosevelt aimed to address economic challenges by providing relief, recovery, and reform. While some programs were effective in creating jobs and stabilizing banks, others faced criticism for being insufficient or slow to implement. The New Deal fundamentally transformed the role of government in economic matters and laid groundwork for future social safety nets, but it did not fully end the Great Depression until World War II stimulated economic growth.

Related terms

Stock Market Crash of 1929: The sudden and dramatic decline in stock prices that occurred in late October 1929, which is often cited as the starting point of the Great Depression.

New Deal: A series of programs and policies implemented by President Franklin D. Roosevelt aimed at recovering the economy and providing relief to those affected by the Great Depression.

Dust Bowl: A series of severe dust storms during the 1930s that greatly damaged the ecology and agriculture of the American prairies, exacerbating the economic hardships of the Great Depression.