Question

How did WWI cause the great depression?

Answer 1

Hint: World War I or the Great War started in 1914 followed by the murder of Archduke Franz Ferdinand of Austria. The conflicts over this assassination evolved into a war in Europe which lasted until 1918 . In the war nations including Germany, Austria-Hungary, Bulgaria and the Ottoman Empire (the Central Powers) created allies and conflicted against Great Britain, France, Russia, Italy, Romania, Japan and the United States.

Complete answer:
WWI which happened during the years have caused a large amount of economic damage. This happened due to many reasons. The main reason is the destruction during the war, millions of people were killed and the material destruction was of an enormous scale. These aftereffects created a global economic downfall following the war. On top of this, the industrial area faced another backlash by adopting extremely laissez-faire economic policies in the stock markets and banking. The prices of agricultural products went down as the agriculture scenario in Europe deteriorated. The price of basic necessities got higher and many people were jobless. The US banks have granted large loans to European countries, with which they have purchased goods from the US. In order to satisfy the growing international needs, this caused the US agricultural and other products to go into overproduction. When some European nations began to recover ,their goods in the market began fighting against US (mainly agricultural) products on the US market. European countries had to desperately request for debt forgiveness for their loans.

Note: The USA had left World War One in a place of envy. This was a major investment by the Entente forces in U.S. infrastructure and industry. New York had greatly strengthened its already impressive role as a source of finance in competition with London, and the disruption of international business had helped the US enter many markets where there was little presence before the war.