Explain the causes of the Great Depression.

The causes of the Great Depression were:

1. Agricultural overproduction was made worse by falling agricultural prices. As prices slumped and agricultural incomes declined, farmers tried to expand production and bring a larger volume of produce to the market to maintain their overall income. This worsened the glut in the market, pushing down prices even further.
2. In the mid-1920s, many countries financed their investments through loans from the US. Countries that depended crucially on US loans now faced an acute crisis. The withdrawal of US loans affected much of the rest of the world, though in different ways. In Europe, it led to the failure of some major banks and the collapse of currencies such as the British pound sterling. In Latin America and elsewhere it intensified the slump in agricultural and raw material prices.