Unit 1-Lesson 14&15 Prosperity

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The Great Depression
The Great Depression can be termed as the most severe economic depression of the 20th century it affected the whole world but began in the U.S.A. The event took place from 1930 to 1941, where it began when the American economy deteriorated. The prices of commodities went low and started to spread to other parts of the world. The effects hit everyone in the economy both rich and the poor. Everything including revenues from taxes, commodity prices, profits dropped drastically. Cities in the worlds especially the industry dependent cities were greatly affected. (Robins, 2007)
The great depression can be attributed to being caused by several factors which include the following;
The Bull Market; the bull market can be briefly described as a financial market where the price increase is expected as a result of certain securities. That makes them predictable that way especially when one follows the previous trends in the occurrence of prices. Investors, manufacturers, and marketers thought that prices would continue to increase. The second factor is buying on margin which is simply the expectation of an investor in the process of purchasing that the middleman set. The first payment made to the broker before making the purchase. This affected the great depression in such a way that after people paying this initial price the commodity’s prices went down and people suffered big losses. Hence the deepening of the depression. The last factor which is a cause of the great depression is watering of prices, this is virtually increasing the value of the product.

When the product reaches the market, it would have reduced in quality hence drop in prices. This led to price fall hence initiating the depression. Further use of it, therefore, deepened the depression. (Robins, 2007)In conclusion, the great depression was caused by several factors the above mentioned are just but a few of the major causes of the great depression that affected the whole world in the 1930s.

Works Cited
Robins L., The Greatest Depression Ludwig Von Mises Institute, 2007.