Great Depression in economic and money terms

Great Depression in Economic and Money Terms Page 4 Great Depression in Economic and Money Terms

The Great Depression is considered to be one of the most remarkable event of the XX century . From the very beginning till the very end it ruled sway the destinies of people : somebody was loosing everything other just started to obtain the power one man couldn 't help starving another was growing up in prosperity . It has left its mark in every family of such industrially developed countries as the USA , Germany Great Britain . The rising tide

lifts all boats , and it all started from the country which was first-rated by all economic criterion in the world - the USA

In the late twenties , a lot of reasons to be very optimistic towards development of American national economy arose . Since the First World War there was the quick increasing of both labor productivity (let 's recollect at least Ford 's conveyor ) and actual families income . Even farmers who suffered from the landslide of prices on agricultural products , when European farming had turned back to the ordinary course after the War , increased their profitability in the end of twenties , so that this stratum of society could afford buying trucks and variety of agriculture vehicles

But there where vulnerable places inside such a healthy economy . At first , Americans didn 't tend towards the cautious optimism . The euphoric feeling of new era ' prevailed in society of those days . Besides rich people , millions of Americans of average income and even workers were buying up the shares of companies awaiting of the quick rise in their values

Let 's define some basic definitions for better understanding of the issue . The power of economy is measured by two main categories : the financial potential and economic stability . Funds (or financial assets are the most common medium of exchange , and as we proceed further , you will get to know several main laws of interdependency amid money supply (production , or printing of money by the government ) and economic stability . The latter is commonly weighted by such numbers as growth of prices and its relevance to the growth of average citizen 's income , etc Now , let 's dwell on the major principle of supply and demand : when the first exceeds over the latter , the cost of each item of supplied product goes down . Vise versa , when demand exceeds over supply , demanded production 's cost goes up . Therefore , in those times , the USA experienced the same : costs on each share (share , to say , is any of equal portions into which the capital stock of a corporation is divided and ownership of which is evidenced by a stock certificate ) where increasing when people chaotically leaned to buy some constant quantity of the shares (i .e . some static supply . Thus , the common value of shares registered at New York stock exchange multiplied in three times during 1924 - 1929 . Economic theory emphasizes that this public excitement and expectations always results in down-fall of prices , and this problem is...