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Economyc Depression - Research Paper Example

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A severe downturn that lasts for long duration is known to be an "Economic Depression" by the economic critics. Moreover, economists believe that is much worse and intense in magnitude than a recession, which is assumed to be a part of the business cycle…
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Economyc Depression
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Economyc Depression

Download file to see previous pages... Depression is also defined on the basis of two general rules:
• A decline in real GDP over and above 10%, or
• A recession constantly experienced for 2 or more years.
These days, the term “Depression” is frequently associated with the Great Depression of the 1930’s, though the very term had been in use for quite long before then.
History of Economic Depressions
There have been many periods of long-drawn-out economic downfall in different countries/regions since 1945, but naming these as "depressions" is contentious. The most considerable worldwide economic crisis in the history after the Great Depression, the recession of late-2000s, has also been named as “Depression” at times, but this terminology is not in general use, even though economic researchers name them as “Great Recession”.
The “Great Depression”
The Great Depression was an event which started on October 1929, when the stock market in the United States dropped swiftly. More than hundreds of financiers and investors drowned their capital and got bankrupted, even the history writes them to be raised to the grounds and were compelled to live on the streets, time and again going without food. These circumstances resulted to the Great Depression. In modern times, the resulting period of ten years was categorized as the most terrible time-span with extremely high unemployment rate and near to the ground business activity. Almost all of the industries, business hubs, factories, shopping stores and trade centers left numerous Americans out of work, rendered homelessness, and caused people to live without food. A gigantic number of people were depending on the State administration or else charity organizations, to provide them with food (Shannon 1960; Parker 2007). Almost all countries were severely affected by this massive and worst economic downfall and came forward as facing “The Great Depression” of 1930’s. It led to a sharp turndown in world trade as each country tried to protect their industries. The Depression led to political turmoil in many countries such as Germany where poor economic conditions led to the rise of Hitler. Franklin D. Roosevelt was elected President in 1932 and his 'new deal' reforms gave the government more power and helped slow the depression. By the time, as nations enhanced the production of weapons and other war equipments, the Great depression began to stroll towards an end. The increasing production of war materials led to open job opportunities for masses and resulted in the injection of big sums of money back into the business flow. Many of the factors resulted into the great depression; one of them being the lack of diversification in the economy of United States. The overall economic success of America used to be dependent on very few industries; for instance ...Download file to see next pagesRead More
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