The Mystery of the Great Depression

The document discusses the causes and spread of the Great Depression through the reverse multiplier effect. It explains how a slowdown in demand for durable goods like cars and housing led to job losses in those industries. This caused unemployed workers to spend less, reducing demand and jobs in other industries in a continuing cycle. It also describes how bank failures led to a one-third reduction in the money supply from 1929-1933, further slowing business activity and job creation. Problems with the banking system, money supply, and adherence to the gold standard exacerbated the Depression.Read less