<u>During the decade of the 1930s the Great Depression severly affected the US economy and was the central issue to be dealt with</u>. During Roosevelt's presidency, the New Deal was implemented (between 1933 and 1938)as a packet of measures designed to combat the harsh situation of the US economy.
The New Deal was based on Keynesian economics that identified, as the major cause of the Great Depression, the extremely low aggregate demand figures. This solution aimed to boost demand figures by directing large sums of public money to the creation of job positions for the large unemployed sectors of popualtion, so that they could start to earn a salary and to demand products again. Large sums of money were pumped into public works (roads, constructions, etc).
<u>Therefore, the Keynesian solution to the Great Depression brought goverment interventionism in the economy at all levels.</u> Also more regulations were demanded for the economy, in order to prevent a similar crisis the future.
Moreover, these severe domestic problems fostered the establishment of a policy of isolationism. The US ignored the tensions that were ocurring in Europe, the emergence of fascism and some other issues that subsequently would lead to WWII.
