1. How did the Great Depression Start?
The Great Depression started on Tuesday, October 29, 1929; now called Black Tuesday. The United States New York stock exchange had crashed. The stock prices plunged and many people tried to sell their stocks, but no one was buying them. Not only had the stock market caused bankruptcy among people, but the banks who had also invested in the stock market were forced to close down. Another factor that took place during the Great Depression was the Great Plains because they were hit by drought and dust storms.
2. How did the Current Recession Start?
The Current Recession started in December 2007. It was defined as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators.” The most severe factors of this recession are the contractions in the housing market and the problems in the financial markets. Also banks increased interest rates causing many people were unable to pay for their house mortgages and the price of oil increased rapidly.
3. How did the government take part following the event? Were/ are they successful attempts?
During the Great Depression, the government spent millions and created work programs. Also they raised tariffs to protect industries within their own countries and created an employment insurance that would help with jobs and decrease the unemployment rate. Although they did these things, the government was unsuccessful. Now during the Current Recession, the government is spending billions on our country, helping larger companies that are near bankruptcy, helping with the unemployment and creating a better economy through technology and science. Moreover, during this recession, the government is quite successful because these attempts are helping and affecting the country in a positive way.
4. What factors are present now that were not present during the Great Depression? ( ie banking, online resources, etc.)
Some factors that are present now that weren’t present during the Great Depression are improved social programs, banking, internet, media and credit cards.
5. How did these two affect US GDP?
These two events extremely affected the United States GDP. They cause people to save more money because they couldn’t afford the luxuries they could in the past; causing many demands to decrease. Many people could only afford to spend their income on the basic necessities. Also the unemployment rate increased, causing less money flow in the economy.
6. Reflection: In your own words, tell me which one has made more of an impact on the world.
In my opinion, I think they Great Depression left more of an impact on the world instead of the Current Recession. One reason is that the Great Depression lasted approximately 10 years. Although we can’t predict when the recession is going to end, at this moment the depression lasted longer. Another reason is that the unemployment rates were much higher in the 1930’s and were nowhere close to the current unemployment rates. The depression left many people jobless and cringing to provide food for themselves and their families. Even though the recession is also causing unemployment issues, the government has hopefully learned from the depression and is going to help people in a more effective way. To conclude, economist say the current recession is worse, but I say to each their own opinion.
Resources:
http://history1900s.about.com/od/1930s/p/greatdepression.htm
http://americanhistory.about.com/od/greatdepression/tp/greatdepression.htm
http://research.stlouisfed.org/publications/es/09/ES0904.pdf
http://www.buzzle.com/articles/causes-of-economic-recession.html
http://en.wikipedia.org/wiki/Recession
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