Question

Analyse any two factors that were responsible for the Great Depression in America during 1929.

Answer 1

1. Agricultural overproduction persisted, exacerbated by falling agricultural prices.
2. Farmers attempted to expand production and bring a larger volume of produce to market as prices fell and agricultural incomes declined, but this pushed down prices.
3. Many countries financed their investments through US loans in the mid-1920s because it was extremely easy to raise loans in the US when times were good.
4. However, in the first half of 1928, countries that relied heavily on US loans faced a severe crisis.
5. The withdrawal of US loans had various effects on the rest of the world. It resulted in the failure of small major banks and the devaluation of currencies such as the British pound sterling in Europe.