The main thing that businesses and industries did during this time that caused the economy to slow down was to invest carelessly in business, to the point where they became wildly overvalued--leading to an economic bubble that "burst".
<u>Apart from the financial crash, the intensity of the Great Depression was reinforced due to the simultaneous overproduction crisis.</u>
In a situation of a demand shortage, there is an unsold part of the production. Such unsold items generate losses for the company. If low demand levels persist, companies will be forced to reduce their production and the amount of inputs, including labor. If employment levels are reduced, demand levels decrease further than before.
