The Great Depression was the crisis of 1929 1932 was the most profound crisis of capitalist production. It took European economies for four years. The crisis struck deeper in the United States of America.The Great Depression had a tremendous impact on the metropolitan economies for a period of four years. The effects are the following:-
(a) Massive unemployment; The Great Depression was characterized with low prices that let to reduction in profit; the decline in profits compelled the capitalists to retrench workers thus leading to Massive unemployment rose from 3.2% in 1929 to 24.9% in 1939.
(b) Decline in production; There was a massive fall in the levelof production activities; the Great Depression was characterized with falling prices and profits which forces the capitalists to reduce production and in some cases to close their industries and factors.
(c) Widespread poverty; The Great Depression led to widespread poverty both in the United States of America and Europe. Poverty was due to low purchasing power which was caused by massive unemployment.
(d) Collapse of the agricultural sector; The Great Depression contributed to the collapse of the agricultural sector, the fall in production was caused by the rising prices of farm implements such as tractors and fertilizers. Due to the rise of prices, farmers could not purchase the farm implements thus contributing to the collapse of the agricultural sector.
(e) Inflation; The Great Depression contributed to widespread inflation in both the United States of America and Europe. The Great Depression was characterized by low levels of production which later on pushed up prices due to rising demand for goods. In 1929 countries such as Germany and Britain were characterized by hyper inflation that reduced the value of their currencies.
(f) Collapse of international trade; The Great depression contributed to the decline of international trade because it was associated with hyper inflation which contributed to loss of the value of money thus discouraging trade among countries. The Great depression also contributed to the collapse of many commercial banks, this too contributed to the collapse of international trade.