1. The Great Depression Mystery
Whatdunnit?
The Great Depression Mystery

2. 1920s prosperity House and automobile sales Credit LACK PANTS!
Lots of job creation
Multiplier effect
One person’s spending becomes income to another person, who in turn can spend more and add to the income of others.

3. Economic Depression (1929-1939)
Reverse multiplier effect
Home and automobile sales began to fall
Job creation and expansion slowed
Unemployment rose

5. Business Cycle
A slowdown in business activity (a recession) begins with a fall in demand for durable goods.
Durable goods
Goods that are relatively expensive and don’t wear out quickly, such as cars or refrigerators.

7. Depression
Demand for durable goods wear out and prices fall. Normally some people begin to buy again and the economy will begin to recover…

8. depression-whatdunnit?
Instead of coming out the recession, we experienced a severe long lasting depression
Why???
Stock Market crash 1929, investors were not confident
Banks closed in record numbers
Money supply reduced by 1/3