The great depression in terms of macroeconomics

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The Great Depression: When Great Despair Brings Great Knowledge

The United States was built on an idea that sober means creates sober measures. But what happens when those moderate times turn into trying times with drastic complications? The Great Depression was the worst economic slump in United States history, but by no means the only depression that our nation as endured. This depression is arguably one of the most misunderstood events in America's history. The magnitude of this "Great Depression" was so severe, that it affected the rest of the industrialized world. This Depression officially started in 1929 and continued for about a decade. Yet the causes for the Depression had been looming for some time. There are many key factors that brought about this depression, but it can be blamed mainly on the unequal distribution of wealth during the 1920's, stock market speculation, and the lack of regulation. This lack of regulation is proof to some economists of how unregulated capitalism is not best for our nation, and only economic regulations can save capitalism.

This imbalance in wealth in the 1920's created a very unstable government (Barber 4). The speculation in the stock market in the 1920's also caused many people to buy their stocks with borrowed money, and once they acquired the stocks they used them as collateral for buying more stocks (Barber 5). This boom in the stock market was also very unsteady, because it was based on borrowed money and false positive speculation. When this optimism was lost by investors the stock market collapsed. During the 1920's the economy was not stable. Since wealth was not spread evenly, and most of the money was in with the few families who saved and invested rather than spent their money on American goods, the supply was greater than...