The Great Depression and The Recession

1. How did The Great Depression start?


The main reason The Great Depression started was because of the stock market crash of 1929 which in result created a spiraling domino effect because after the market crash it lead to :

• Bank failures
• Conservation of income
• Noneffective goods production
• Drastic unemployment rate increases
• Trading barriers that caused frustration during exports/imports.

2. How did the recent recession start?

The recent recession of 2007 started mainly because of the huge deficit that the US had created as well as the real estate market crash which caused a domino effect that lead to: 

• GDP & Capital investment decrease
• Industrial output decline
• Drastic unemployment rate increases
• Increased fuel prices
• Sluggish income flow

3. How did the gov't take part of the following event? Were they successful attempts?

The gov't took huge roles to aid the process of recovery of both depression and recession. During the depression the gov't

• Heavily taxed imports
• Social services increase
• Food vouchers
• New jobs

During the recession of 2007 the gov't took the roles of :

• Bailout's for large corporates
• Bankruptcy prevention programs
• Employment increases
• Stabilizing real estate markets

4. What factors are now present that were not during "The Great Depression"?

The advantages that we have now in a modern society compared to the past of 1929 are:

• Era of technology
• Government support of services
• Banking tactics
• Recorded studies of past mistakes

5. How did these 2 events affected United States GDP?

Clearly during these events, GDP definitely dropped and there were many factors that contributed towards the decrease of GDP and they were :

• Huge conservation of money because of society's fear.
• Luxury items were second thoughts which lead to over production.
• All points mentioned above.

Since there was a drop in the GDP rates this meant that US Dollars aren't as valuable and employment, production were scarce.

6. Reflection of which one made the biggest impact

I strongly believe that "The Great Depression" caused the greatest impact of a countries financial history. The depression literally brought many people into immense levels of stress because of low incomes, no jobs, scarce food. The Great Depression lasted for 10 years which is incomparable to the recent recession since the event did not bring the economy to a complete halt. 1929 was the very early years of the development of industries so they were unexperienced which lead do the disastrous stock market crash. Overall "The Great Depression" created the most impact and many has learned from it.