Great Depression

The Great Depression was a severe economic crisis that affected many countries around the world. It began in 1929 and lasted through most of the 1930s. An economic crisis means a time when businesses fail, people lose jobs, and money becomes scarce. The Great Depression started in the United States but soon spread to Europe, Asia, and other regions.

One major event linked to the beginning of the Great Depression was the Wall Street Crash of October 1929. Wall Street is a financial center in New York City. During the crash, stock prices fell very quickly. A stock is a small share of a company that people buy and sell. Many banks and investors lost large amounts of money. Banks then had less money to lend, which slowed business activity.

As the crisis deepened, factories reduced production or closed. Farmers also suffered because food prices fell sharply. Unemployment increased as businesses laid off workers. Unemployment means not having a job while wanting one. In some countries, millions of people were unemployed at the same time. Many families struggled to buy basic goods such as food and clothing.

The Great Depression affected different countries in different ways. In the United States, industrial production dropped sharply. In Germany, economic problems increased social and political tension. In many places, international trade declined. Trade means buying and selling goods between countries. When trade fell, economies became weaker because countries could not easily sell their products abroad.

Governments responded with various actions. In the United States, President Franklin D. Roosevelt introduced programs known as the New Deal. These programs increased government spending on public works, such as roads and buildings. The goal was to provide jobs and support the economy. Other countries also increased government control over banks and industries.

By the late 1930s, many economies slowly began to recover. Recovery means returning to normal conditions. The start of World War II in 1939 increased demand for industrial goods, which further reduced unemployment. The Great Depression officially ended during the early 1940s, but its effects influenced economic thinking and government policies for many years afterward.