Question

What factors led to the Great Recession?

Answer 1

Answer:

In short, the factor that caused the great recession was overproduction, which was not prepared for the lack of demand, and ended up with all the goods stopped without any consumer buying them.

Explanation:

When the First World War came to an end, some European countries were weakening their economies, while the United States grew more and more, profiting from the export of food and industrialized products.

As a result, North American production became accustomed to this growth, which increased day by day, especially between the years 1918 and 1928. It was a scenario with many jobs, low prices, high production in agriculture and the expansion of credit that encouraged unbridled consumerism.

The problem for the United States was that Europe began to reestablish itself, which led to less and less import from the United States.

Now the American industry could no longer sell the exaggerated quantity of goods, with more supply of products than demand. This has led to a fall in prices, a fall in production, and consequently an increase in unemployment. These factors led to a fall in profits and a halt in trade, leading to a stock market crash and causing the great recession.