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guajiro [1.7K]
2 years ago
8

Which economic policies of the 1920s and 1930s helped cause and deepen the depression. since the depression soon became worldwid

e, did the depression's fundamental causes lie inside or outside the united states?
History
1 answer:
Fittoniya [83]2 years ago
7 0
I'll answer just your first question.  On Brainly, it's good to post separately for each question you have.

In the 1920s, people were so eager to invest and earn profits through the stock market that they bought stocks "on margin."  In other words, they paid for only a marginal percentage of the stocks with their own funds, and borrowed bank funds for the rest of the purchase.  By the late 1920s, 90% of the purchase price of stocks was being made with borrowed money.  This inflated the market in a way that spiraled out of control, and in 1929 the market crashed.

In response to the market crash and the beginning of the Depression, the Smoot-Hawley Tariff (officially the Tariff Act of 1930) tried to protect American jobs by imposing heavy tariffs on imported goods.  But what this did was to provoke other countries to impose their own tariffs as a response. As a result, world trade was greatly diminished and the Depression spread globally.
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