Question

Was the onset of the Great Depression fundamentally endogenous to the capitalist economy, or was it...

Was the onset of the Great Depression fundamentally endogenous to the capitalist

economy, or was it a political failure?

Homework Answers

Answer #1

The onset of the Great Depression was initially a political failure. Political failure in the economy of the United States led to fall in the level of private investment in the economy. This fall in the level of private investment led to fall in the overall aggregate demand in the economy and thus total national output or national income of the economy fell by a multiple amount. This led to recession in the economy of the United States which ultimately led to Great Depression of 1930s.

Thus, the main reason of the onset of the Great Depression in the economy was political failure which led to fall in private investment or capitalist investment in the economy.

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