Causes of Depression

Although each of the five factors relate to each other and contribute to the collapse of the economy, I feel as though the over-production by American industries had the biggest impact. I believe that this is the most powerful one for two reasons: Firstly, these industries were mass producing items that were temporarily popular. Of course, they had a big impact when they first came out, so consumers were intrigued and drawn to the new products that American industries were producing. All people have an abstract and physical sense of curiosity, and the rise of these products was feeding it perfectly. People were instantly interested in buying these products, so they did. And the industries made more products because sales were rising. The only bad aspect about this is that there are only so many consumers. If someone already has the product, they probably won't need another one, unless they are wealthy. And in addition to that, there are people that won't be able to buy the product because they can't afford it. So all the industry is left with is a lot of unsold products that will have no purpose. Secondly, when the industry first came up with the product, many people invested in it in the stock market. As these industries became more popular and more people were purchasing their products, the values of these stocks went up. However, once the industries made more products than consumers could buy, the values started decreasing, which made more people start to sell their stocks, without anyone willing to buy them because the market was decreasing at a rapid pace. Because of this, the stock market was going down a shaky path, which would eventually lead up to its collapse and the Great Depression.

Economic Boom

I mostly agree with that statement because three of the five reasons of the economic boom were directly related to the motor industry. The other two are indirectly related.Republican policies were proven right because of the production and growth of many industries, including the automobile industry. The US was producing more than all the countries in the world combined. Republican policies can relate to industrial strengths because many other industries grew because of the automobile industry, like gas, petroleum, leather, glass, steel production, etc. Because of the growth in this industry, new methods were created for ease and simplicity for making automobiles. Credit was established so that more people could buy cars or other products without having to pay upfront. However, with credit came interest, and the responsibility and ability to pay off things in the future.