IndexCauses of the Great DepressionStock Market Crash of 1929Overproduction and UnderconsumptionBank Failure and Banking CollapseEffects of the Great DepressionEconomic EffectsSocial EffectsPolitical EffectsConclusionReferences:During the Late 1920s and Early 1920s of the 1930s, the world witnessed one of the most devastating economic crises in modern history: the Great Depression. The Depression lasted over a decade and severely affected countries around the world, causing widespread unemployment, poverty and social unrest. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay The Causes of the Great Depression The Great Depression was caused by a combination of factors, including the stock market crash, overproduction, underconsumption, bank failures, and monetary policies.Stock Market Crash of 1929A major cause of the Great Depression was the stock market crash of 1929. The stock market crash was fueled by speculation and overconfidence in the market, as well as a lack of government regulation and oversight. 10% of American families invested in the stock market, causing stock prices to rise rapidly. As stock prices soared, investors became overconfident and continued to buy more shares, pushing prices further. However, the market was not supported by solid economic fundamentals, and when it inevitably collapsed, investors lost everything. Furthermore, the government did little to regulate the market and prevent risky investments. This lack of supervision played a significant role in the severity of the collapse. Overproduction and Underconsumption Another major cause of the Great Depression was overproduction and underconsumption. The unequal distribution of wealth and the decline in purchasing power led to a decrease in demand for goods, which resulted in an excess supply of products. Large companies continued to produce goods at high levels, despite declining demand. This excess of goods led to falling prices and reduced profits, causing many businesses to go bankrupt. Bank failures and collapse of the banking system The banking system played a vital role in the economy and its collapse was due to wrong monetary policies, panic and hoarding. was a major factor in the Great Depression. During the 1920s, the Federal Reserve system implemented policies that encouraged banks to increase their lending activities and invest heavily in the stock market. This led to credit expansion, which created a false sense of economic growth and fueled the stock market bubble. However, when the market crashed, millions of panicked investors withdrew their money from banks, causing them to fail. The government was unable to save the banks, resulting in the collapse of the banking system. Effects of the Great Depression The Great Depression had devastating and far-reaching effects on the economy, society, and politics of the United States and many other countries. Effects The most visible and immediate impact of the Great Depression was massive unemployment. In 1933 approximately 25% of the U.S. workforce was unemployed. This led to a significant decline in GDP and industrial production, causing many businesses to fail and leading to even higher levels of unemployment. Poverty and slums have become widespread, with many families unable to afford basic necessities such as food, clothing and shelter. Many have.