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The Causes of the Depression
During the 1930's there was a world wide economic crisis known as the great depression, which effected many countries including Europe and America. The great depression had managed to affect a vast amount of different industries such as agriculture and finance bringing them down to an almost standstill causing unemployment rates to increase and consumer demand to decrease.
The causes of the great depression are debateable due to different economists theory on government policies and macroeconomics. However, in this essay the causes of the great depression and how it had escalated to a world - wide scale problem will be discussed.
In the view of Keynes, a depression is a case of "severe recession, where people hoard money no matter how mush central banks try to increase money supply". To cure the depression, Keynes had believed that the government should start to do what consumers were not doing, like increase the spending. He had referred to this as "priming the pump".
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