BVM2-Task4.docx A. The Great Depression was a result of many factors; a few examples

BVM2-Task4.docx    A.    The Great Depression was a result of many factors; a few examples are stock market crash, banking panics, and decreased international lending. In 1929 the stock market crashed, taking close to forty-billion in US dollars. In the early 1920s, stocks seemed to be the solution to making money, and brokers would sell shares to individuals or businesses. These stocks would be sold on margin, and part of the money was placed in a loan.The profits were then repaid to the people from the shares. The stocks made the market at its highest, but the crash took it all way.  The faith of the people became decreased for the economy. The people dramatically lowered the amounts of spending. Their stock was only worth 20% of what they originally paid for them (Norton, 2015).   Another cause of the Great Depression was banking panics and monetary contractions. Most banks crashed from the stock market, but some of the banks were able to stay above water. An example of the banks protecting their money was by not making many loans. With no investments that meant less spending in the economy. President Roosevelt unsure of the stability of the banks and ordered them to be closed. The banks could not reopen until they could prove to the government they could hold their own(Norton, 2015).    Decreased international lending and tariffs also followed in during the Great Depression. In 1930, Smoot-Hawley Tariff was established to help American companies and prevent further loss. Foreign trade