Chapter 11 — History & Culture
What caused the Great Depression?
The 1929 stock crash triggered a bank panic, which collapsed the money supply. The Fed made it worse by tightening credit; a global trade war (Smoot-Hawley) deepened the slump. Unemployment hit 25% in the US.
Follow-up questions
How did it end?
Slowly — the New Deal helped; WWII spending ended it decisively.
Could it happen again?
The 2008 response — flooding money and backstopping banks — was designed exactly to prevent a repeat.
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