Explain the two factors responsible for the Great Depression in the world in 1929


#1

The Great Depression of 1929 was caused by a combination of several factors :
Firstly agricultural overproduction remained a problem. This was made worse by falling agricultural prices. As prices slumped and agricultural income declined, farmers tried to expand production and bring a larger volume of produce to the market to maintain their overall income. This worsened the situation by pushing down the prices further. Secondly by mid - 1920s many countries financed their investment through loans from US. US overseas lenders panicked at the sign of trouble and withdrew their amount. Countries that depended on US loans now faced acute financial crisis.