The Great Depression of the 1930s made it clear to most people that the market economy, if left alone, would suffer periodic collapse.
Supply and demand, two economic forces, govern the creation of goods and services in a market economy.
The stock market crash in October 1929, which paralyzed Wall Street and destroyed millions of investors, signaled the start of the Great Depression. Consumer spending and investment fell during the following years, which led to sharp drops in industrial output and employment as faltering businesses laid off workers.
The 1929 stock market crash, the Smoot-Hawley Tariff's impact on global trade, government policies, bank failures and panics, and the depletion of the money supply are a few of the explanations cited for the Great Depression.
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