Depression vs. Recession Depression – a significant decline in the gross domestic product that lasts several years. Recession – a temporary downturn in economic activity usually indicated by two consecutive quarters of falling GDP. http://economics.about.com/cs/businesscycles/a/depressions.htm
Great Depression Originated in the U.S. starting with the fall in stock prices on Sept. 4, 1929 and became worldwide with the stock market crash on Oct. 29, 1929. Also known as the Wall Street Crash of 1929. Personal income, tax revenue, profit and prices dropped and unemployment in the U.S. rose to 25% and in some countries up to 33%. http://en.wikipedia.org/wiki/Great_Depression_in_the_United_States#Facts_and_figures
Cont. Some people blamed late President Herbert Hoover for the economic downturn. After 3 years, Franklin Delano Roosevelt claimed the position of presidency introducing the program New Deal. AAA – Agricultural Adjustment Administration CCC – Civilian Conservation Corps WPA – Works Progress Administration http://history1900s.about.com/od/1930s/p/greatdepression.htm
Causes of the Great Depression The stock market crash of 1929. Major cause of the great depression and after 2 months stockholders lost more than $40B. Bank Failures Bank deposits were not insured and so people lost their savings and surviving banks would not let people create new loan. http://americanhistory.about.com/od/greatdepression/tp/greatdepression.htm
Reduction in Purchasing People stopped purchasing with the fear of losing their money due to the fear of further economic downturn. American Economic Policy U.S. created the Smoot-Hawley Tariff Act in 1930 which charged high tax to imports that led to less trading between U.S. and other countries. http://americanhistory.about.com/od/greatdepression/tp/greatdepression.htm
Result of the Great Depression Worldwide collapse of economy. Many people became ill with diseases such as tuberculosis. Many people were homeless and jobless. Unemployment rose rapidly. Savings accounts were wiped and most banks closed due to bankruptcy. http://en.wikipedia.org/wiki/Great_Depression_in_the_United_States#Facts_and_figures
Opinion: The great depression served as a lesson for all and showed the importance of the role of government in the economy. The government should aid the businesses with more programs to avoid problems in the economy. The central bank should closely monitor the money supply since one of the causes of the great depression was the contraction of money by the Federal Reserve.
Economists, as well as the government should carefully study the economy to avoid another economic downturn. People should also be aware of the status of society and help in stabilizing the economy. We should continue to help the society to improve the economy to avoid another great depression. http://www.millionaireacts.com/wp-content/uploads/2009/11/unemployment-rate-rose-in-the-great-depression.jpg