AGD1B

What caused the Great Depression? Why was it a global problem? As one of the consequences of WWI, most of the European countries for instance Germany were in debt. Therefore they borrowed money from the U.S, whose economy has improved after WWI. The U.S. economy went down because the other European countries were not able to pay back the money that U.S lent them. This was caused by the uneven distribution of wealth, overproduction by business and agriculture, and lessening demand for consumer goods. Although the other European countries tried to improve their economy via exporting, the U.S.’s high tariffs served as a barrier. Thus, European countries could not export so their economy went down as well. As a result, world trade dropped by 65%. Since the U.S. citizens refused buying products that came from other countries, the neighboring European countries failed to export their goods to the U.S. Similar to the cause of the assassination of Duke Franz Ferdinand, the collapse of the stock market was the ultimate spark that caused Great Depression. People all wanted to sell the stock market in New York since the stock was going down at a rapid pace. This led to the fall of the stock market since everybody just wanted to sell their stock and not buy any.