During the decade of the 1920's the U.S. experienced dramatic economic growth which brought a rise in national and individual wealth. Yet at the end of the decade the economy collapsed in a way Americans had never experienced. Explain what caused both the rise and fall in this cycle of prosperity and depression between the world wars.
2007-07-21 14:01:02 · 6 answers · asked by Anonymous in Arts & Humanities ➔ History
The stock market crash triggered a collapse of the banking system while the federal reserve that was set up to step in emergencies such as this did nothing. So much for the fall.
Pent up demand following the First World War and the availability of consumer credit can explain the rise as well as anything else, but remember that the prosperity of the 20's missed large portions of the country. Farm income never recovered from the nosedive it took in 1920.
2007-07-21 19:40:34 · answer #1 · answered by tulsatop 2 · 0⤊ 0⤋
Yes, there was "a rise in national and individual wealth," but not everyone gained wealth equally. Different types of buying such as "buying on credit" and risky ways of paying for stocks came into being. Then came the stock market crash of 1929. There was also a matter of drought... heard of the Dust Bowl?
2007-07-21 16:08:59 · answer #2 · answered by betyoucantfindme 4 · 0⤊ 0⤋
read "The Kondratieff Business Cycle" by Nicolai Kondratieff, available from Princeton University Press at your peril. In 1925 he predicted the Great Depression, the period of Deflation that followed and the period of inflation after WWII. We dodged the bullet in 1987 but there may be an explanation for that that may be most unpleasant. It involves deflation and inflation running in a 3 generational cycle.
2007-07-21 14:11:40 · answer #3 · answered by balloon buster 6 · 0⤊ 0⤋
This is so obviously an exam question. I think professors are going to have to stop giving take-home exams, or maybe go visit Yahoo! answers, if people keep taking them here. In the meantime, you can look up answers on Wikipedia, or in your textbook. You did buy the textbook, didn't you?
2007-07-21 14:12:56 · answer #4 · answered by anotherguy 3 · 0⤊ 0⤋
One big contributing factor was the Smoot-Hawley Tariffs Act. It cut global trade to a fraction of its previous level.
2007-07-21 16:05:21 · answer #5 · answered by desertviking_00 7 · 0⤊ 0⤋
speculation and hubris
2007-07-21 17:48:03 · answer #6 · answered by jean 7 · 0⤊ 0⤋