The Great Depression

Economic Definitions

Recession: A prolonged economic contraction lasting somewhere between 6 to 18 months.

Economic Definitions

Depression: When a recession is especially long and severe.

no precise definition in terms of length but usually includes high unemployment (above 10%) and low production.

The Great Depression

Most severe economic downturn in history of the industrial world.

Production fell by one thirdUnemployment rose to about 25%

Causes of the Great Depression

1920s economy was out of balance Americans are increasingly in debt Speculation was on the rise Overproduction slows industrial growth Federal government limited the money

supply to discourage lending Stock Market crashes in October 1929