Question

How did the economic trends of the \[1920s\] help cause the Great Depression?

Answer 1

Hint: The longest and most extreme depression the modern Western world had ever experienced was the Great Depression. The Great Depression triggered dramatic decreases in manufacturing, significant unemployment, and acute deflation in nearly every nation in the world, even though it started in the United States.

Complete answer:
In the past of the developed nation, the Great Depression was the worst economic crisis, extending from the stock exchange crash of \[1929\] to \[1939\]. After the October \[1929\] stock market crash, which sent Wall Street into a frenzy and wiped-out millions of investors, the Great Depression began. Consumer spending and consumption plummeted over the next few years, triggering sharp decreases in economic production and jobs as struggling businesses lay off employees. The U.S. economy was destroyed by the \[1929\] Great Depression. Unemployment increased to \[25\% \], and homelessness rose. House rates plunged \[67\% \], foreign trading fell by \[65\% \], and deflation exploded past \[10\% \]. \[3.4\] It took \[25\] years for the financial market to rebound. A third of all banks crashed. Yet there were some positive impacts as well. Safeguards were installed by the New Deal systems to make it less possible that the Depression might happen again. Overall, the Great Depression had an overwhelming effect on nine primary territories.
The economy shrank \[50\] percent over the first five years of the crisis. In \[1929\], as calculated by gross domestic product, economic production was \[\$ 105\] billion. That is equal to more than \[\$ 1\] trillion today.
In August \[1929\], the economy started declining. \[650\] banks had collapsed by the end of the year. According to the Bureau of Economic Research, the economy shrank another \[8.5\] percent in \[1930\].
The economic developments of the \[1920\]s that helped bring about the Great Depression were the intense confidence of the people in the economy. All willingly invested their money and hoped that they would get paid back. Which left the economy struggling to the eventual crash, and people losing their money without savings.

Note: The Great Depression in recent history is regarded as the biggest and also the longest economic decline or contraction. It began in the USA and had a rippling impact on the world's economies after that.