Table of ContentsCauses of the Great Depression Stock Market Crash of 1929Overproduction and UnderconsumptionBanking and Banking CollapseEffects of the Great DepressionEconomic EffectsSocial EffectsPolitical EffectsConclusionReferences: Late 1920s and In the early 1930s, the world witnessed one of the most devastating economic crises in modern history: the Great Depression. The depression lasted for more than a decade and hit countries around the world hard, causing widespread unemployment, poverty, and social unrest. Say no to plagiarism. Get a custom essay on “Why Violent Video Games Should Not Be Banned”?Get the original essayCauses of the Great DepressionThe Great Depression was caused by a combination of factors, including the stock market crash, overproduction, underproduction. consumption, bank failures and monetary policy errors. Stock Market Crash of 1929 One of the main causes of the Great Depression was the stock market crash of 1929. The stock market crash was fueled by speculation and overconfidence in the market , as well as a lack of regulation and government oversight. Around 10% of American households invested in the stock market, which led to a rapid rise in stock prices. As stock prices soared, investors became overconfident and continued to buy more shares, driving prices up even more. However, the market was not supported by strong economic fundamentals and when it inevitably crashed, investors lost everything. Additionally, the government has done little to regulate the market and prevent risky investments. This lack of oversight played a significant role in the severity of the crash. Overproduction and underconsumption Another major cause of the Great Depression was overproduction and underconsumption. The unequal distribution of wealth and decline in purchasing power led to a decrease in demand for goods, which resulted in an oversupply of products. Large companies continued to produce goods at high levels, despite falling demand. This excess of goods led to lower prices and reduced profits, causing many businesses to go bankrupt. was a major factor in the Great Depression. During the 1920s, the Federal Reserve implemented policies that encouraged banks to increase their lending activities and invest heavily in the stock market. This led to an expansion of credit, which created a false sense of economic growth and fueled the stock market bubble. However, when the market crashed, millions of panicked investors withdrew their money from banks, causing many of them to go bankrupt. The government was unable to save the banks, leading to the collapse of the banking system. Effects of the Great Depression The Great Depression had profound and devastating effects on the economy, society, and politics of the United States and many other countries. EffectsThe most visible and immediate impact of the Great Depression was massive unemployment. In 1933, approximately 25% of the American workforce was unemployed. This caused a significant decline in GDP and industrial production, causing many businesses to go bankrupt and leading to even higher levels of unemployment. Poverty and slums became widespread, with many families unable to afford basic necessities such as food, clothing and shelter. Many struggled to survive and had to resort to begging or stealing to survive. Social effects La Grande.