Task_4_by_April_Maddox.docx Great Depression-Factors A: There were many factors that le
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Task_4_by_April_Maddox.docx Great Depression-Factors A: There were many factors that led to the Great Depression. One such factor was underconsumption. Housing demand slowed as did demand for cars and appliances. Inventories were building up for retailers, so they too started ordering fewer supplies. Due to all of this decrease in spending, workers wages were being cut and many jobs were eliminated. This created a vicious circle of families spending less, so employers kept cutting wages and jobs. Businesses also began taking out loans that they couldnt repay, which caused the collapse of the banking industry. (Norton, 2015). Another factor leading to the Great Depression was American lending to European countries. America was lending huge sums of money to finance World War I, but American investors started investing in stocks instead of lending. This caused the European countries to stop spending money in the United States, which in turn added to the underconsumption issue described previously. We also loaned millions of dollars to Germany, of which they were able to pay back only a small percentage before they defaulted (Norton, 2015). B: President Franklin Roosevelt created many policies, together called the New Deal, in an attempt to end the Great Depression. One such policy was the Tennessee Valley Authority Act, which was a plan to build dams along the Tennessee River in order to prevent flooding and also to generate cheap electricity. A side benefit of this act was that it provided many new
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