Explain how falling demand for goods, less spending, may lead to an economic depression.
- Reference to at least two causes of the Great Depression
- An example of the multiplier effect

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08-04-2021
History

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Explain how falling demand for goods, less spending, may lead to an economic depression.
- Reference to at least two causes of the Great Depression
- An example of the multiplier effect

Sagot :

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ilsa183 ilsa183 · Answer 1 · 2021-04-08T10:15:17-04:00

Answer: The stock market crash in 1929 reduced aggregate demand substantially. Consumer purchases of durable goods and business investments fell sharply after the crash. The falling demands for goods and the subsequent less spending led to recession and a prolonged economic depression.

The fall in consumerism caused the economy to decline exponentially. From the steady state the economy was in in the 1920s, the fall in consumerism caused the economy to decline into an economic depression. This led to the multiplier affect, which was where the cost of something as simple as bread was dramatically increased.

Explanation:

https://www.britannica.com/event/Great-Depression/Causes-of-the-decline

Sagot :

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