Business Failures

Srijaa K, Sydney N, Henriikka N

The Great Depression: Worldwide Business Slump of the 1930s

In the 1930’s, American stock values began dropping, leading banks and businesses to close. Unemployment was rampant. One minor contributing factor was the skewed distribution of income. The “Roaring Twenties” witnessed great prosperity, but day laborers in industries such as mining did not share in the riches. No money was spent, people bought things on credit and defaulted on their debts, and business began a rapid decline with fewer consumers purchasing their products. The failure rate for businesses during the Great Depression was 127 out of every 10,000. This downturn in the U.S. economy began affecting other countries all around the world.

The Great Depression: Unemployment Rates and Business Failures

This video is good to watch to gain a better understanding about the Great Depression, the factors that led to it, and the issues that led to the failure of businesses.
Causes of the Great Depression

Additional Information

  • The prices of industrial stocks fell 80%
  • Banks and individuals with investments lost large sums of money
  • Increased number of people purchased goods on credit
  • Americans couldn't buy goods, factories couldn't provide employment
  • Other countries were affected as well such as Australia, Canada, Chile, France, Germany, etc.

Milton Friedman talks about the Great Depression and the Causes and Effects Leading to Business Failures

Milton Friedman - The Great Depression Myth


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Did business failures generally increase or decrease from 1920 to 1932?

Business failures generally increased during this period.